Stay focused on growth in ‘13 · Systèmes, Everything 3D and Aveva NET at Aveva) which would...

January 9, 2013

Technology - Software & Services Stay focused on growth in ‘13

Software & IT Services outperformed in 2012, driven by sharp re-ratings. With multiples closer to long-term averages, 2013 returns should be closer to EPS growth with any re-rating as a bonus. We look for topline-driven growth over value in Software, & better margins from restructuring in Services.

Changes: We upgrade Temenos from EW to OW (PT SFr19 from SFr15.4) and downgrade both Atos (PT €56 from €54) and Capgemini (PT €36 from €39) to EW from OW. Our price targets are now 2014e driven and we see 7% upside on average in the sector.

Software – secular growth drivers: We expect these trends to enable certain companies to maintain topline growth this year, even with an uneven macro. This means we stick with paying a premium for high quality growth (SAP, Dassault Systèmes, Aveva & Amadeus) although we see less upside potential than at this stage last year (11-12% for this group now vs. 17% in 1Q last year). Our preferred pick is SAP as we like its mix shift to fast growth areas like Big Data / Analytics, Cloud and Mobile. We also add Temenos to our OW list. While the upside to our base case is not huge (13%), TEMN offers one of the highest upsides to our bull case (67%). We do not expect growth to accelerate materially at Sage (EW) or Software AG (UW) and so leave our ratings here unchanged.

IT Services – turning more cautious: While a search for higher beta names usually leads us to IT Services companies, we fear the macro outlook in Europe will not be strong enough to drive sufficient topline growth for meaningful margin expansion. Our preference remains for restructuring stories (Atos, Steria, Tieto) but fear this is already close to discounted at both Atos and Tieto. Our only OW in this group is Steria, driven by its lowly rating, and we remain UW on Indra due to its geographic / industry exposure and FCF-based valuation premium.

Exhibit 1

What’s Changed?

Ticker Current Prior Current Prior

Overweight

SAPG.DE OW unch. € 69.0 € 61.0

AMA.MC OW unch. € 21.0 € 18.0

AVV.L OW unch. 2400.0p 2070.0p

DAST.PA OW unch. € 95.0 unch.

TEMN.S OW EW CHF 19.0 CHF 15.4

TERI.PA OW unch. € 19.0 € 17.0

Equalweight

ATOS.PA EW OW € 56.0 € 54.0

SGE.L EW unch. 320.0p 280.0p

CAPP.PA EW OW € 36 € 39

Underweight

TIE1V.HE UW unch. € 15.0 € 13.0

SOWG.DE UW unch. € 32 € 24

IDR.MC UW unch. € 8 € 8

Rating Price Target/ Base Case

Unch. = Unchanged Source: Morgan Stanley Research

Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.

For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to NASD/NYSE restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Morgan Stanley & Co. International plc+

Adam Wood [email protected] +44 (0)20 7425 4450

Clare R Spinks [email protected] +44 (0)20 7425 9290

Sid Mehra [email protected] +44 (0)20 7425 2686

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January 9, 2013 Technology - Software & Services

Conclusion – prefer Software to IT Services

We retain a preference for Software companies After a sharp re-rating in 2012 we see far less scope for performance to be driven by this in 2013, as valuations have moved up to average historical levels or above. As a result, we focus on the companies that we believe have the strongest growth outlook, as we see mid-term EPS growth prospects being the main share driver in 2013.

But see less upside in 2013 in the defensive growth names We have a clear preference for Software companies as we believe these can offer the clearest exposure to strong, secular trends, as well as a superior business model and geographical exposure. Within this group we have SAP, Amadeus, Aveva and Dassault Systèmes at OW as we believe they offer the strongest topline growth potential over the next 2-3 years.

SAP has aggressively moved its new business mix to fast growth areas such as Big Data / Analytics (with HANA and Business Objects), Cloud (with SuccessFactors and Ariba) and Mobile (via the Sybase offering). We also see scope for SAP’s Sybase database business to deliver strong double-digit growth.

Dassault Systèmes and Aveva are both trading at premium ratings and close to the highs of their mid-term trading ranges. However, we believe this is justified as both companies have strong product cycles (V6 / 3D Experience at Dassault Systèmes, Everything 3D and Aveva NET at Aveva) which would normally drive a growth acceleration. We also like the large recurring revenue bases at these two companies (65% at DS, 70% at Aveva). Aveva also offers exposure to two major structural trends (Oil & Gas exploration and expanding Power generation capacity) while we believe the changes in distribution at Dassault and entry into new industries meaningfully expand its available market.

Amadeus continues to offer a defensive cash cow business (GDS) and a high growth business (IT Solutions) where we still see strong avenues for growth long-term (increased penetration of airlines and their IT needs, moves into Airports, Hotels and Rail).

However, after an extremely strong performance in 2012, we believe the upside on these companies is more limited (11-12%).

We move Temenos to OW, adding higher return potential As a result, we look for exposure to a stock that could materially outperform as investor expectations change more fundamentally. Temenos has suffered sharp licence falls, heavy restructuring and two management changes over the last 18 months. While it has bounced off the extreme trough levels seen after its 2Q12 warning, the rating remains below the mid-term average and the company now enters a period where base comparisons ease materially. Temenos also has a cost cutting program under way for 2013, which should enable the company to deliver strong EBIT growth even with limited licence growth as maintenance continues to increase. We forecast EBIT growing 25% in 2013 even with just 3% licence growth. We also expect the new CEO’s (David Arnott) focus on sales execution to bear some fruit.

Temenos offers 13% upside to our base case but 67% upside to our bull case. It is this upside to our bull case and skewed risk / reward (28% downside to our bear case) that lead us to be more positive.

We are more cautious on Sage (EW) and Software AG (UW) as we believe the lower ratings on these stocks are justified due to their lower topline growth outlooks.

We turn more cautious on IT Services A search for higher beta names would usually lead us to be more positive on IT Services. However, we fear that the tepid growth prospects in Europe in 2013 will limit topline growth for the group to low single digits and hence organic margin expansion. We have a clear preference for companies with restructuring initiatives (like Atos, Steria and Tieto) although after the strong performance in 2012 we fear much of this is already in share prices, especially at Atos and Tieto.

We believe Steria (OW) offers the most attractive valuation in this group. We have been positive on the restructuring story at Atos (EW from OW) but believe much of the benefit from SIS is now priced in and so outperformance is now more dependent on how much value Atos can extract from the Worldline payment processing asset and how quickly it can achieve this.

We also lower Capgemini to EW from OW as we do not see significant room for margin expansion and believe the company’s organic growth potential is well reflected in the current share price. We remain UW on Indra and Tieto. On Indra we remain cautious due to its sector premium on cash flow valuation metrics – we would need to see a significant

3



improvement in cash flow generation to turn more positive here.

On Tieto, we have been impressed by the management change and turnaround plan but fear the short-term benefits may be priced in already. We would turn more positive with more visibility on the mid-term margin improvement potential.

Exhibit 2

Top Picks: SAP, Amadeus, Aveva, Dassault Price Upside/ Return in P/E 14/12e CAGR

Rating Target Downside (%) CY12 (%) 2013e EPS GrowthOverweight

SAPG.DE OW € 69.0 +11% 51% 17.9x 16%

AMA.MC OW € 21.0 +12% 52% 13.7x 12%

AVV.L OW 2400.0p +12% 50% 26.2x 15%

DAST.PA OW € 95.0 +11% 39% 22.6x 13%

TEMN.S EW CHF 19.0 +12% 3% 18.1x 27%

TERI.PA OW € 19.0 +27% 11% 7.0x 20%

EqualweightATOS.PA EW € 56.0 +6% 59% 12.0x 15%

SGE.L EW 320.0p +6% 2% 13.4x 12%

CAPP.PA EW € 36.0 +7% 46% 12.8x 9%

Underweight

TIE1V.HE UW € 15.0 -3% 43% 13.2x 12%

SOWG.DE UW € 32.0 +0% 17% 13.2x 8%

IDR.MC UW € 8.0 -24% 7% 10.2x 8%

With ETL drag - we need more evidence BPE can grow consistently to compensate

Weak cash generation and high rating keep us Underweight

Best risk / reward weighting of the software names and we upgrade to add return potential

New management team and restructuring plan make us more positive

Strong cash generation but we'd like to see evidence topline can accelerate

Post bounce off trough valuation we need to see evidence margins improve with limited topline growth

Move to new industries and major new product cycle underpin growth

Rating looks most attractive of the IT Services group

SIS benefits look more in price, Worldline needs to drive rating now

Key Elements of View

Rating still reasonable given potential and HANA / Cloud options

Solid core business and option value in IT Solutions mean rating still attractive

Secular demand (Oil & Gas, Power) combined with 2 product cycles

Source: Morgan Stanley Research

Exhibit 3

What’s Changed? Price % Upside % % CY14

Ticker 13/12/2012 Current Prior Current Prior Base Current Prior Change Current Prior Change EPS Est.

Overweight

SAPG.DE € 62.1 OW OW € 69.0 € 61.0 +11% € 18,388 € 18,434 -0% € 3.58 € 3.61 -1% € 4.19

AMA.MC € 18.8 OW OW € 21.0 € 18.0 +12% € 3,066 € 3,049 +1% € 1.37 € 1.38 -0% € 1.52

AVV.L 2141.0p OW OW 2400.0p 2070.0p +12% £246 £246 -- 82.7p 82.7p -- 94.9p

DAST.PA € 85.8 OW OW € 95.0 € 95.0 +11% € 2,246 € 2,246 -- € 3.87 € 3.88 -0% € 4.36TEMN.S CHF 16.2 OW EW CHF 19.0 CHF 15.4 +18% CHF 465 CHF 465 -- CHF 1.13 CHF 1.09 +4% CHF 1.31

TERI.PA € 14.9 OW OW € 19.0 € 17.0 +27% € 1,885 € 1,917 -2% € 2.43 € 2.43 +0% € 2.90

Equalweight

ATOS.PA € 52.7 EW OW € 56.0 € 54.0 +6% € 9,149 € 9,137 +0% € 4.24 € 4.41 -4% € 4.65

SGE.L 301.5p EW EW 320.0p 280.0p +6% £1,416 £1,432 -1% 22.2p 22.9p -3% 24.7p

CAPP.PA € 33.6 EW OW € 36 € 39 +7% € 10,444 € 10,520 -1% € 2.44 € 2.57 -5% € 2.77Underweight

TIE1V.HE € 15.4 UW UW € 15.0 € 13.0 -3% € 1,822 € 1,869 -3% € 1.19 € 1.18 +1% € 1.35

SOWG.DE € 31.9 UW UW € 32 € 24 +0% € 1,097 € 1,077 +2% € 2.38 € 2.37 +0% € 2.60

IDR.MC € 10.5 UW UW € 8 € 8 -24% € 3,005 € 3,005 -- € 1.01 € 1.03 -2% € 1.12

Median Base Case Upside: +7%

CY13 Revenue Est. (local m) CY13 EPS Est.Price Target/ Base CaseRating


4



Exhibit 4

Risk Reward Comparison

12% 11% 11% 7% 6% 6%

-3%

-24%

Bear

Base

Bull

Current Price

12%12%27%

0%

Price Target

-60%

-40%

-20%

20%

40%

60%

80%

100%

120%

TE

RI.

PA

TE

MN

.S

AV

V.L

AM

A.M

C

SA

PG

.DE

DA

ST

.PA

CA

PP

.PA

AT

OS

.PA

SG

E.L

SO

WG

.DE

TIE

1V.H

E

IDR

.MC

Steria

Aveva plc.

Amadeus

SAP AG

Dassault Systemes

Capgemini

Atos

Sage plc.

Software AG

Temenos

Tieto

Indra Sistemas

Company Base Case Bull Case Bear Case

11x Base Case 14e EPS 13x Bull case 14e EPS 0.4x EV/Sales on Bear Case 2014e

Revenues8x Base Case 14e EPS 11x Bull Case 14e EPS 0.55x Bear Case 14e EV/Sales

12x Base Case 14e EPS 14x Bull Case 14e EPS 4 x Bear Case 14e Maintenance

Revenues17x Base Case FY14e EPS 21x Bull Case FY14e EPS 4 x EV/Recurring revenues FY14e

12x Base Case 14e EPS Based on SOTP: ITS=€42,

SB=€6,ITS=€23

0.2x 2014e Bear Case EV/Sales

12.5x Base FY14e EPS 14x Bull FY14 EPS 3x Bear FY14 EV/Maintenance

20x 2014e EV/FCF or a P/E of 25.3x

13e or 22.4x 14e

24x 2014x EV/FCF or 28.5x 2013e P/E,

24.4x 2014e P/E (MS basis)

3.5x Bear case 14e EV/Recurring

revenues13x Base Case 14e EPS 16x Bull Case 14e EPS 0.3x Bear Case 14e EV/Sales

2015 Base Case P/E of 11x GDS and

16x IT solns. Discounted by WACC

2015 Bull Case P/E of 11x GDS and

2015 16x IT Solns

2014 Bear Case EV/Sales multiple of

4.5x on ITS DCF of the GDS17x Base Case 14e EPS 20x Bull Case 14e EPS 5 x Bear Case EV/Maintenance 2014e

8x Base Case 14e EPS 10x Bull Case 14e EPS 0.3x Bear Case 14e EV/Sales

21.5x Base Case CY14e EPS adj. for

rental model

25x Bull Case CY14e EPS adj. for

rental model

4x Bear Case CY14e EV/Recurring


5



Looking at 2012 performance – the sector outperformed strongly

2012 was a very good year for Software & IT Services. Software outperformed the market by over 20% and IT Services by over 15%. The combined sector was the best performing sub-sector in the year.

Exhibit 5

Relative Price Performance

85

95

105

115

125

135

145

03/0

1/20

12

03/0

2/20

12

03/0

3/20

12

03/0

4/20

12

03/0

5/20

12

03/0

6/20

12

03/0

7/20

12

03/0

8/20

12

03/0

9/20

12

03/1

0/20

12

03/1

1/20

12

03/1

2/20

12

03/0

1/20

13

EU Software Basket EU Hardware BasketEurostoxx 600 EU Services Basket

Source: Datastream, Morgan Stanley Research; EU Software Basket: Amadeus, Aveva, Dassault Systemes, Sage, SAP, Software AG & Temenos; EU Services Basket: Atos, Capgemini, Indra, Steria, Tieto; EU Hardware Basket: ARM, ASML, STMicro, Wolfson, Nokia, Gemalto, Ericsson & TomTom.

6



Re-rating drove the 2012 performance

The 2012 performance was driven by a very strong sector re-rating rather than by material EPS revisions.

As we can see in Exhibit 6, the average re-rating in 2012 was 33% while the consensus 2013e EPS actually fell on average. Admittedly, this was driven by three companies that saw material downgrades (Indra, Software AG and Temenos) but of the remaining companies there was only Tieto that saw double-digit percentage upgrades; the upgrades for the rest of the sector were single digit.

Exhibit 6

Largest Re-Rating and Total Return 13/12 Cons. Re- ∆13e Total EPS Growth Rating EPS Return

ATOS 18% 57% 1% 59%AMA 8% 50% -1% 52%SAP 16% 43% 4% 51%AVV 15% 45% 2% 50%CAPP 7% 38% 3% 46%TIE1V 11% 17% 16% 43%DAST 13% 27% 8% 39%SOWG 11% 42% -16% 17%TERI 19% 16% -5% 11%IDR 7% 33% -24% 7%TEMN 37% 30% -21% 3%SGE 11% 1% -2% 2%Average 14% 33% -3% 32%

Source: Datastream, Morgan Stanley Research

We can visualise this in another way. Exhibits 7 and 8 show the 2013e P/E at the start of 2012 and now relative to the highest and lowest P/E levels of the last 5 years.

We can see that the majority of the companies we follow were trading at the lower or even bottom end of the 5 year average multiples. We would also highlight that this period generally saw multiples well below those of 2000-07, partly due to the Great Recession and partly due to the maturing of the Software sector.

Exhibit 7

5 yr P/E range vs. consensus 13e P/E at start 2012

0x

5x

10x

15x

20x

25x

30x

35x

Amad

eus

Aveva

Atos

CapG

DSYIn

draSag

eSAP

SOWG

Steria

Temen

osTie

to

5 year historical 1 yr fwd consensus P/E range Consensus 2013e P/E

Note: breakpoint represents historical average


Amadeus, Atos, Capgemini, Indra, SAP, Software AG, Steria and Temenos were all trading either right at the bottom of the 5 year range, or well below the 5 year P/E average. Indeed, there was not a single stock trading above the 5 year historical average.

Fast forward to today and there is not a single company trading at the bottom of the trading range and 4 of 12 are trading above historical averages.

Exhibit 8

5 yr P/E range vs. consensus 13e P/E now

0x

5x

10x

15x

20x

25x

30x

35x

Amad

eus

Aveva

Atos

CapG

DSYIn

draSag

eSAP

SOWG

Steria

Temen

osTie

to

5 year historical 1 yr fwd consensus P/E range Consensus 2013e P/E

Note: breakpoint represents historical average


Given this strong performance we feel our base case in 2013 should not include a material re-rating. We expect share price performance to be driven by EPS growth.

7



2013 drivers – where’s the growth?

If we need to rely on growth for performance then we need to consider which companies are best positioned to deliver EPS growth in the next 2 years – the analysis above showing re-ratings and levels vs. historical averages is already based on 2013e P/E and so we need to ensure growth can continue post 2013.

We see topline growth as the most important driver as EPS growth driven by margin improvement is less likely to be sustainable, in our view.

CIO Poll suggests acceleration in 2013 IT Spend Our last MS CIO poll saw a deceleration in expected 2012 IT spending, driven by weakness in Europe. The outlook for the US actually improved in our survey. The CIOs we surveyed expected IT spending overall to accelerate in 2013 with all sectors benefitting.

Software remained one of the faster growing segments in 2012 (just behind Communications) and is expected to accelerate into 2013 to become the fastest growing sub-sector. We would also note that when we ask CIOs about spending priorities, software spending usually tops the priority list.

Services is also expected to accelerate in 2013, but it remains the sub-sector where CIOs see the slowest rate of growth, as is the case for 2012.

Exhibit 9

IT Services set to remain the Slowest Growth Sub-Sector in 2013

Expected 2012 and 2013 Y/Y IT Spending Growth(By Technology)

2.7%

3.1%3.3%

1.2%

2.6%

4.4% 4.4%

3.9%

2.8%

3.8%

0%

1%

2%

3%

4%

5%

Hardware Software Communications Services Overall

Exp

ecte

d Y

/Y G

row

th R

ate

2012 2013

Source: Morgan Stanley Research CIO Poll

Given the slower growth in Europe and the slowdown in spending we saw in this region in 2012, we would also consider the geographic exposure of the two sub-sectors – and the companies themselves.

Geographic exposure positive for Software Exhibits 10 and 11 show the exposure of each company to EMEA, the Americas and Asia-Pacific. We have weighted this geographic exposure to MS’s GDP growth forecasts for each region for 2013 to give a guide for the growth outlook each company may have, based on the GDP growth outlook of the regions it operates in.

We see that the Software companies have a much more global exposure and so should naturally see stronger growth. We see Aveva, Temenos and Dassault Systèmes as having the most attractive geographic exposure, Software AG and Sage the least attractive. The IT Services companies in contrast are primarily exposed to Western Europe. Only Indra and Capgemini have a meaningful exposure to the rest of the world – the US in Cap’s case and Latin America in Indra’s.

Exhibit 10

Software Revenue Split and Effective GDP Growth Software Revenue Split and Effective Growth

3%

3% 3%

2%2% 2% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aveva Temenos DassaultSystemes

SAP Amadeus Software AG Sage0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Americas EMEA APAC Effective Growth Source: Company Data, Morgan Stanley Research estimates

Exhibit 11

IT Services Revenue Split and Effective GDP Growth IT Services Revenue Split and Effective Growth

2%

2% 1%1%

1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Indra Capgemini Atos Tieto Steria

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%

Americas EMEA APAC Effective Growth Source: Company Data, Morgan Stanley Research estimates

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MS IT Services Leading Indicators point to slowdown We have also constructed leading indicator models for the two main sub-segments of IT Services – Consulting & System Integration and Outsourcing.

Exhibit 12

MS Consulting Lead Indicator Model

MS Consulting Leading Indicator Model (MSCOLI)

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

Dec-04 Oct-05 Aug-06 Jun-07 Apr-08 Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-13

Actual

Predicted

R-Squared 0.92

Source: Company Data, Morgan Stanley Research

Both models point to a slowdown over the coming quarters. This is a continuation of an existing trend in the Consulting businesses, while it represents a turn in what had been an accelerating Outsourcing business.

Exhibit 13

MS Outsourcing Lead Indicator Model

MS Outsourcing Leading Indicator Model (MSOSLI)

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Dec-05 Oct-06 Aug-07 Jun-08 Apr-09 Feb-10 Dec-10 Oct-11 Aug-12 Jun-13

Actual

Predicted

R-Squared 0.95


IT Services has already slowed in Europe Exhibit 14 shows the average organic growth of the main European IT Services companies, weighted by their revenue base.

We would highlight two things:

• Growth has already slowed over the last two quarters for the European companies, reinforcing the conclusions of our leading indicator model; and

• Growth in the most recent cycle (3Q10 to 1Q12) has been in a 3-4% range vs. the 6-7% seen in 2007 and 2008.

Exhibit 14

Quarterly IT Services Growth for Euro companies Total - Org growth at CC - European IT Services

9%

6%7% 7%

5%

8%

7%

4%

-1%

-3%

-6%-6%

-4%

-3%

1%

4%4%

5%

3% 3% 3%

0%

1%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Source: Company Data, Morgan Stanley Research; Figures are the average organic growth rates of Atos, Capgemini, GFI, Indra, Sopra, Steria & Tieto weighted by their revenue base

Accenture reinforced the trend in its 1Q13 The most recent data we have in the IT Services market comes from Accenture, which reported its quarter (F1Q 2013) to November 30 on December 19.

Accenture saw revenue growth slow to 5% from 9% in the two prior quarters and consequently missed consensus revenue estimates by 1%. Bookings were also below market expectations ($7.5bn vs. street at $7.8bn) and bookings were down 2% ex FX.

Within this, consulting revenues were flat ex FX and have been slowing consistently since the February 2011 quarter when consulting revenues grew 20% ex FX. Consulting bookings were flat ex FX.

While Outsourcing growth was still double-digit, the 13% ex FX growth seen in 1Q was below the 18-20% growth Accenture saw in Outsourcing in 2012. We acknowledge that Outsourcing bookings are more volatile and so we would not call a trend in any one quarter, however Outsourcing bookings were down 5% in the quarter (ex FX).

9



Exhibit 15

Accenture quarterly Consulting & O/S growth ex FX

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

No

v-0

6

Fe

b-0

7

Ma

y-0

7

Au

g-0

7

No

v-0

7

Fe

b-0

8

Ma

y-0

8

Au

g-0

8

No

v-0

8

Fe

b-0

9

Ma

y-0

9

Au

g-0

9

No

v-0

9

Fe

b-1

0

Ma

y-1

0

Au

g-1

0

No

v-1

0

Fe

b-1

1

Ma

y-1

1

Au

g-1

1

No

v-1

1

Fe

b-1

2

Ma

y-1

2

Au

g-1

2

No

v-1

2Consulting growth ex-FX O/S growth ex FX


Consistent with the concerns we have on European IT Services growth, Accenture saw EMEA revenues flat in 1Q after growth of 8% in fiscal 2012.

Exhibit 16

Accenture quarterly revenue growth by region ex FX

-20%

-10%

0%

10%

20%

30%

40%

No

v-0

6

Fe

b-0

7

Ma

y-0

7

Au

g-0

7

No

v-0

7

Fe

b-0

8

Ma

y-0

8

Au

g-0

8

No

v-0

8

Fe

b-0

9

Ma

y-0

9

Au

g-0

9

No

v-0

9

Fe

b-1

0

Ma

y-1

0

Au

g-1

0

No

v-1

0

Fe

b-1

1

Ma

y-1

1

Au

g-1

1

No

v-1

1

Fe

b-1

2

Ma

y-1

2

Au

g-1

2

No

v-1

2

EMEA - Growth ex FX Americas - Growth ex FX APAC - Growth ex FX Source: Company Data, Morgan Stanley Research

Industry analysts see better Software than Services We also consider the industry analyst outlook for 2012-14e – for IT spending overall and then for Software & IT Services specifically.

The industry analysts in general expect 2013e and 2014e to grow, albeit generally at a slightly slower rate than in 2012. This is different to our CIO poll conclusion, although one of the three main industry analyst firms has 2013 growing more quickly than 2012, in-line with MSe.

Exhibit 17

Industry analyst IT spending growth forecast

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

2011 2012e 2013e 2014e

IDC IT spend Gartner IT spend Forrester IT spend

Source: Gartner, IDC, Forrester, Morgan Stanley Research

However, the picture is quite different when we consider the growth expectations by sub-sector and by region within the sub-sectors.

In-line with our CIO polls, IDC and Gartner see Software as one of the fastest growing sub-sectors in tech, with growth expected to be 6-7% in 2011-2014e. The global IT Services market is only expected to grow at 3-5%. However, we should also take account of the geographic exposures of the companies. While the Software companies are generally quite global (and so looking at a global growth forecast seems reasonable), the European IT Services companies are predominantly exposed to Western Europe. Here IDC and Gartner only see 0-3% growth in 2011-14e, which reinforces our view that the growth outlook for this group is much lower.

10



Exhibit 18

Industry analyst IT spending growth – by sector

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

IDC -Software

Gartner -Software

IDC -Services

Gartner -Services

IDC -Euro

Services

Gartner -Euro

Services2011 2012e 2013e 2014e

Source: Gartner, IDC, Forrester, Morgan Stanley Research

Software has a much better geographical exposure Exhibit 10 demonstrates the global exposure of the European Software sector. In comparison to IT Services (Exhibit 11), Software companies are in a much better position to take advantage of global GDP growth, with more than 50% of revenues coming outside of EMEA for Aveva and ~45% for SAP.

Software is more directly exposed to key industry trends As we can see from our CIO poll results (Exhibit 19) software projects dominate the “top 3” project lists. SAP is the key beneficiary here given its exposure to DW/BI/Analytics, ERP, Cloud and CRM.

Exhibit 19

DW and BI/Analytics Spending top priorities

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

DW/BI/Analytics

Security

ERP

Virtualization

Cloud Computing

CRM

Mobile Hardware

Storage

Collaboration

Mobile Applications

VoIP

Data Center

VPN/Remote Access

IT Outsourcing

Compliance

Systems Mgmt Software

Networking

Applications Software

Printers

Windows

HR

Consulting

Servers/Mainframe

Desktop/Laptop

% Total Top Three Projects

With Increasing Spend

With Decreasing Spend

Net %

Oct 12

Survey

8%

7%

5%

4%

4%

3%

2%

2%

2%

2%

1%

1%

1%

0%

0%

-1%

-1%

-1%

-3%

-4%

-4%

-4%

-6%

-11%

Net %

Jul 12

Survey

7%

3%

3%

7%

3%

1%

0%

2%

1%

2%

0%

2%

1%

-3%

1%

2%

-1%

-2%

-2%

0%

0%

-3%

-2%

-9%


Software companies can also benefit from new products/upgrade cycles and luckily we have this at three of our top pick companies.

• V6 and 3DExperience at Dassault Systemes

• Aveva NET and Everything3D at Aveva

• HANA, mobile and cloud at SAP

Our other main long, Amadeus, benefits from airline migrations and the opportunity to a) add more airlines, b) sell more new products into those airlines and c) move into adjacent areas – airports, hotels and rail.

11



Business Models suggest Software deserves a material premium

In our previous section we looked at the potential growth drivers for the two sub-sectors and concluded that the growth outlook is materially better for Software companies than it is for IT Services companies.

Software has outgrown IT Services over the last 7 years

The historical data also reinforce this view. From 2005-08, there was not a huge growth difference between Software and IT Services companies. While the Software companies achieved stronger and consistent double-digit growth, IT Services companies were boosted by the growth of Outsourcing in Europe and grew at a high single-digit rate.

In the downturn the growth was also not that different, with Software demonstrating its resilience due to maintenance revenues and both sub-sectors seeing mid single digit revenue declines.

However, in the rebound from the Great Recession, the Software vendors have been able to maintain a consistently higher growth rate – back to mid/high single digits while the IT Services companies have been at low single digits at best.

Exhibit 20

Annual IT Services Growth for European companies

Total organic growth at cc - European IT Services

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

2005 2006 2007 2008 2009 2010 2011 2012

Weighted Org. Growth Source: Company Data, Morgan Stanley Research; Figures are the average organic growth rates of Atos, Capgemini, GFI, Indra, Sopra, Steria & Tieto weighted by their revenue base

Exhibit 21

Annual organic growth for European Software Companies

Total organic growth at cc - European Software

-10%

-5%

0%

5%

10%

15%

2005 2006 2007 2008 2009 2010 2011 2012

Org revenue growth weighted by revenue base

Source: Company Data, Morgan Stanley Research. Figures are the average annual org. growth rates for Amadeus, Aveva, Dassault Systemes, Sage, SAP, Software AG & Temenos weighted by their revenue base.

Software has a higher level of recurring revenues

The maintenance revenues at Software companies give them a strong defensive nature and these revenues have still grown even through the Great Recession. We also believe that these maintenance revenues are the highest margin revenue stream. Our favoured Software companies (SAP, Aveva, Amadeus and Dassault Systemes) have recurring revenues representing over 50% of total revenues.

Exhibit 22

IT Services: FY2011 % Recurring Revenues IT Services FY2011 - % Recurring Revenues

0%

10%

20%

30%

40%

50%

60%

70%

80%

Atos Steria Tieto CapG Indra Source: Company Data, Morgan Stanley Research

In contrast, the recurring revenues at IT Services companies tend to come from Outsourcing which tends to have margins in-line with or slightly lower than the group averages. In addition, while these revenues are contracted, the average term of an outsourcing agreement of c. 4-5 years means that

12



on average 20-25% of Outsourcing revenues will have to be renegotiated each year. While the majority (70% and above) of contracts tend to go back to the incumbent vendor, pricing can often come under some pressure. We would also note that Outsourcing revenues will naturally decline each year as the standard contract would see revenues fall 2-3% per annum.

In contrast, the pricing on maintenance for Software companies has been rising over the last few years.

Exhibit 23

Software: FY2011 % Recurring Revenues Software FY2011 - % Recurring Revenues

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Amadeus Aveva Sage DassaultSystemes

SAP Temenos Software AG


Cash generation materially better at Software companies

The Software vendors have achieved operating margins of 25% plus from 2005-12 on average and this has been rising with 2011/2 margins closing in on 30% for the group. Also these reported margins tend to be “clean” as there are no recurrent restructuring charges for the Software vendors. If there is a restructuring charge in a year, this tends to be a real “one-off” event, rather than a charge that recurs every year.

Free cash flow generation has also been strong with a clear link between EBIT margins and free cash flow. The companies we follow in Software have seen 15-20% free cash flow / sales for the 2005-12 period and as with EBIT margins, this ratio improved slightly in the 2011/12 period.

Exhibit 24

Sector Averages: Software (Adj. EBIT, FCF, Adj. EBIT post restructuring)

Sector Averages

0%

5%

10%

15%

20%

25%

30%

35%

2005-2012 2011/2012

Adj. EBIT Margin (%) FCF as a % of sales


In contrast, operating margins are much lower at IT Services companies. Reported operating margins have been 7-8% on average at these companies but these margins are generally stated before “exceptional” restructuring charges. Unlike at Software companies however, these charges tend to recur every year and so the margins after restructuring have been around 6% from 2005-12 and actually slightly below 6% for the 2011/12 period.

The other major difference is in cash flow generation. Free cash flow has been around 3% of sales from 2005-12 but this actually deteriorated to below 2% in 2011/12.

We believe the combination of slower growth, lower margins and weak free cash flow generation are the main reasons behind the derating the IT Services sector has seen over the last decade and our outlook does not suggest that these characteristics should change materially in future.

13



Exhibit 25

Sector Averages: IT Services (Adj. EBIT, FCF, Adj. EBIT post restructuring)

Sector Averages

0%

2%

4%

6%

8%

10%

2005-2012 2011/2012Adj. EBIT Margin (%)

Adj. EBIT post Restructuring margin (%)

FCF as a % of sales


Company specifics

Cash generation is generally impressive at Software companies, with Temenos lagging The cash generation is actually very consistent across Software in general with free cash flow over 15% of sales for every company, except Temenos from 2005-12. The best cash generators have been Aveva and Dassault Systemes (20% plus), with Sage and SAP (high teens) not far behind.

An improvement at Temenos could help drive a re-rating One of the reasons for our upgrade of Temenos is that this is a company that we believe has one of the best opportunities to change investor perceptions in 2012. While investors already discount the strong cash generation at the other software companies, the weaker cash flow at Temenos has been a negative for the shares.

Cash generation is clearly a major element of the new management team’s focus and some improvement has already been made in this respect. However, we acknowledge that it is easier to improve DSOs and working capital when new software licences are declining rather than growing which has been the case at Temenos over the last 6 quarters. We believe the appointment of Thibault de Tersant to the Temenos Board is a further positive here and we think is further evidence cash flow is a serious topic for the company. Mr de Tersant is the CFO of Dassault Systèmes and has taken on the role of Chairman of Temenos’ Audit Committee. We believe Mr de Tersant is very well regarded by the investor community and the track record of cash generation at Dassault Systèmes shows what can be achieved.

In the longer-term, we are believers in Temenos’ vision that banks will move away from expensive, in-house developed software and will move to packages like those provided by Temenos.

While the market is more crowded and competitive than it was 5 years ago, Temenos has consistently ranked as the No. 1 or No. 2 vendor (outside the US) for core bank wins and so we believe still has a strong market position. In addition, we believe banks are at the very early stages of this migration suggesting there is a very large available market and so growth opportunities for a number of players.

Shorter-term, we are reassured by four key elements:

1) Temenos is now entering a period where it has very easy base comparisons – and the market has expectations of roughly flat to low single-digit licence growth off these easy comps. As a guide, the 4Q consensus is for c. flat licences off a -33% base.

2) Temenos will lower its cost base in 2013 – with maintenance growing, we estimate EBIT can be up 25% even with just 3% licence growth

3) Temenos business mix has shifted almost entirely to smaller deals (c. $1m) vs. the $2-3m and above deals it would have done 2 years ago. If larger deals come back even slightly, there would be significant leverage.

4) Management change has returned the focus to short-term sales execution. We think Temenos’ focus shifted away from short-term sales execution in 2H11 and 1H12. We believe CEO David Arnott has already made changes in this regard to demonstrate that short-term sales delivery is critical.

14



Exhibit 26

Margin/FCF analysis Software – average 2005-12e

Sector Averages

0%

5%

10%

15%

20%

25%

30%

35%

Amadeus Aveva DSY Sage SAP SOWG Temenos Average

Adj. EBIT margin (%)

FCF as a % of sales

Adj. EBIT margin post restructuring margin (%)

Source: Company Data, Morgan Stanley Research estimates (e)

Cash generation is mixed in IT Services The picture is more mixed when we turn to IT Services, with some companies materially better than others when it comes to cash generation.

Tieto and Steria have actually seen better cash generation over the last 7 years, with Capgemini not far behind. Atos and Indra were the worst performers.

Looking forward, it is clear that the new Atos management team has made cash generation a focus for the group and management is partly incentivised on this metric. Cash conversion has already improved at the company and we would expect this to continue in future.

On the other hand, Indra’s cash generation has consistently weakened each year and it is here that we see the largest gap between P&L EBIT margins and free cash flow generation.

Exhibit 27

Margin/FCF analysis IT Services – average 2005-2012e

0%

2%

4%

6%

8%

10%

12%

Steria Indra CapG Tieto Atos Average

Adj. EBIT Margin (%) Adj. EBIT post Restructuring margin (%) FCF as a % of sales

Source: Company Data, Morgan Stanley Research estimates (e)

15



MS vs. Consensus

Going into CY2013, our estimates are generally not materially different to consensus on most of our coverage.

Exhibit 28

Services: estimated revenue vs. consensus %

Stock MS Cons. Variance VarianceATOS.PA €9,149.1 €9,028.5 121 1%TERI.PA €1,884.9 €1,858.2 27 1%CAPP.PA €10,444.0 €10,572.0 -128 -1%IDR.MC €3,005.0 €3,006.5 -1 0%TIE1V.HE €1,822.2 €1,846.8 -25 -1%

Source: Thomson Reuters, Morgan Stanley Research

Exhibit 29

Services: estimated EBIT vs. consensus %

Stock MS Cons. Variance VarianceATOS.PA €677.4 €677.1 0 0%TERI.PA €128.5 €119.6 9 7%CAPP.PA €810.7 €824.0 -13 -2%IDR.MC €259.9 €252.7 7 3%TIE1V.HE €148.7 €149.4 -1 -1%

Source: Thomson Reuters, Morgan Stanley Research

Exhibit 30

Software: estimated Revenue vs. consensus

%Stock MS Cons. Variance Variance

DAST.PA €2,246.3 €2,235.6 11 0%AVV.L £253.8 £247.9 6 2%AMA.MC €3,065.5 €3,003.6 62 2%SAPG.DE €18,387.7 €18,445.7 -58 0%SOWG.DE €1,097.3 €1,100.3 -3 0%SGE.L £1,416.3 £1,404.5 12 1%TEMN.S CHF464.9 CHF466.7 -2 0%


Exhibit 31

Software: estimated EPS vs. consensus

%Stock MS Cons. Variance Variance

DAST.PA €3.87 €3.86 0.01 0%AVV.L £.85 £.87 -0.01 -1%AMA.MC €1.37 €1.38 -0.01 -1%SAPG.DE €3.58 €3.61 -0.03 -1%SOWG.DE €2.38 €2.34 0.04 2%SGE.L £.22 £.22 0.00 1%TEMN.S CHF1.15 CHF1.14 0.01 0%


16



Valuation

Exhibit 32

European IT Services – EV/Sales 1Y FWD European IT Services - EV/Sales 1Y FWD

0.32x

0.96x

0.59x

0.2x

0.4x

0.6x

0.8x

1.0x

05 06 07 08 09 10 11 12 13

EV/Sales Min Max Avg

0.52x


Exhibit 33

European IT Services – EV/EBIT 1Y FWD European IT Services - EV/EBIT 1Y FWD

4.7x4.7x

12.6x12.6x

8.6x8.6x

2x

4x

6x

8x

10x

12x

14x

05 06 07 08 09 10 11 12 13

EV/EBIT Min Max Avg

6.9x


Exhibit 34

European IT Services – P/E 1Y FWD European IT Services - PE 1Y FWD

6.2x

19.4x

13.1x

0x

5x

10x

15x

20x

05 06 07 08 09 10 11 12 13

PE Min Max Avg

11.1x


Exhibit 35

European Software – EV/Sales 1Y FWD European Software Sector - EV/Sales 1Y FWD

1.7x

4.0x

3.2x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

05 06 07 08 09 10 11 12 13

Min Max Avg EV/Sales

3.5x


Exhibit 36

European Software – EV/EBIT 1Y FWD European Software Sector - EV/EBIT 1Y FWD

6.5x

15.9x

5x

7x

9x

11x

13x

15x

17x

05 06 07 08 09 10 11 12 13

Min Max Avg EV/EBIT

12.2x12.5


Exhibit 37

European Software – P/E 1Y FWD European Software Sector - PE 1Y FWD

7x

9x

11x

13x

15x

17x

19x

21x

23x

25x

27x

05 06 07 08 09 10 11 12 13Min Max Avg PE

25.3x

17.8x17.6x

11.0x


17



Exhibit 38

European Software Valuation Tables

Software: Valuation : MS Forecasted Data2 3 4 5 6 7 8 9 10 13 14 15 16 17 18 19 20 23 24 25 26 27 28

Ticker Rating Ccy PricePrice

TargetMkt Cap in

€ mnEV in € mn

EPS CAGR

PEG

8-Jan 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2011 - 13 2012 e 2011-13 2012 e

EUROPEAN SOFTWARE

Amadeus AMA.MC O EUR 18.7 21 8,346 10,197 14.9x 13.6x 11.1x 9.8x 4.6x 4.2x 9.1x 8.1x 3.4x 3.1x 5.3% 6.0% 1.9% 2.0% 12.4% 1.2

Aveva AVV.L O GBp 2,144.0 2,400 1,824 1,604 30.2x 26.2x 17.7x 16.1x 7.7x 7.3x 17.1x 15.5x 5.5x 5.2x 3.9% 4.4% 1.1% 1.2% 16.0% 1.9

Dassault Systemes DAST.PA O EUR 84.9 95 10,683 9,579 26.3x 22.6x 15.5x 13.4x 7.2x 6.6x 12.7x 11.1x 4.6x 4.2x 4.2% 5.0% 0.8% 1.0% 15.6% 1.7

Sage SGE.L E GBp 306.0 320 4,827 5,023 15.0x 13.4x 11.1x 9.8x 5.3x 4.6x 10.5x 9.2x 3.0x 2.7x 6.2% 7.3% 3.3% 3.5% 5.8% 2.6

Software AG SOWG.DE U EUR 31.6 32 2,750 2,812 14.1x 13.3x 9.1x 8.0x 6.8x 6.1x 8.7x 7.7x 2.5x 2.2x 7.1% 8.7% 1.4% 1.5% 2.0% 7.0

Temenos TEMN.S O CHF 16.7 19 1,030 1,105 27.5x 19.0x 19.2x 14.9x 6.8x 6.5x 11.6x 9.9x 3.0x 3.0x 3.6% 4.4% 0.0% 0.0% 19.9% 1.4

SAP SAPG.DE O EUR 61.0 69 72,691 71,173 21.4x 17.8x 15.4x 12.4x 8.8x 7.4x 13.2x 10.9x 4.6x 3.9x 4.3% 5.3% 1.2% 1.4% 10.7% 2.0

MEAN 14,593 14,499 21.3x 18.0x 14.2x 12.0x 6.7x 6.1x 11.8x 10.3x 3.8x 3.5x 4.9% 5.9% 1.4% 1.5% 11.8% 2.5

MEDIAN 4,827 5,023 21.4x 17.8x 15.4x 12.4x 6.8x 6.5x 11.6x 9.9x 3.4x 3.1x 4.3% 5.3% 1.2% 1.4% 12.4% 1.9

Dividend YieldEV/EBITDAEV/EBIT EV/SalesP/E EV/Recurring FCF/EV

Software: Valuation : MS For Consensus Data

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


TargetMkt Cap in

€ mnEV in € mn

EPS CAGR

PEG

8-Jan 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2011-13 2012 e

EUROPEAN SOFTWARE

Amadeus AMA.MC O EUR 18.7 21 8,346 10,197 14.9x 13.6x 11.1x 9.8x 4.6x 4.2x 9.1x 8.1x 3.4x 3.1x 5.3% 6.0% 1.9% 2.0% 12.4% 1.2

Aveva AVV.L O GBp 2,144.0 2,400.0 1,824 1,604 29.9x 25.9x 17.5x 15.9x 7.7x 7.3x 16.9x 15.4x 5.5x 5.2x 3.9% 4.4% 1.1% 1.2% 15.8% 1.9

Dassault Systemes DAST.PA O EUR 84.9 95.0 10,683 9,579 24.9x 21.9x 14.7x 12.9x 7.2x 6.6x 12.1x 10.8x 4.6x 4.2x 4.2% 5.0% 0.8% 1.0% 15.2% 1.6

Sage SGE.L E GBp 306.0 320.0 4,827 5,023 15.0x 13.4x 11.1x 9.8x 5.3x 4.6x 10.5x 9.2x 3.0x 2.7x 6.2% 7.3% 3.3% 3.5% 5.8% 2.6

Software AG SOWG.DE U EUR 31.6 32.0 2,750 2,812 14.1x 13.3x 9.1x 8.0x 6.8x 6.1x 8.7x 7.7x 2.5x 2.2x 7.1% 8.7% 1.4% 1.5% 2.0% 7.0

Temenos TEMN.S O CHF 16.7 19.0 1,030 1,105 24.0x 16.6x 16.2x 13.1x 6.8x 6.5x 11.6x 9.9x 3.0x 3.0x 3.6% 4.4% 0.0% 0.0% 11.0% 2.2

SAP SAPG.DE O EUR 61.0 69.0 72,691 71,173 19.5x 16.9x 14.1x 11.8x 8.8x 7.4x 13.2x 10.9x 4.6x 3.9x 4.3% 5.3% 1.2% 1.4% 12.8% 1.5

MEAN 14,593 14,499 20.3x 17.4x 13.4x 11.6x 6.7x 6.1x 11.7x 10.3x 3.8x 3.5x 4.9% 5.9% 1.4% 1.5% 10.7% 2.6

MEDIAN 4,827 5,023 19.5x 16.6x 14.1x 11.8x 6.8x 6.5x 11.6x 9.9x 3.4x 3.1x 4.3% 5.3% 1.2% 1.4% 12.4% 1.9

P/E EV/EBIT FCF/EV Dividend YieldEV/Recurring EV/EBITDA EV/Sales


18



Exhibit 39

European Services Valuation Tables

Services: Valuation Multiples: MS Forecasted Data2 3 4 5 6 7 8 9 10 13 14 17 18 19 20 23 24 25 26 27 28


TargetMkt Cap in €

mnEV in € mn EPS CAGR PEG

8-Jan 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2011 - 13 2012 e

EUROPEAN SERVICES

Atos ATOS.PA E EUR 53.2 56 5,108 4,844 15.3x 12.1x 9.2x 7.2x 5.4x 4.5x 0.53x 0.48x 5.3% 8.4% 0.8% 0.8% 35.8% 0.4

Capgemini CAPP.PA E EUR 33.5 36.0 5,437 5,005 14.5x 13.0x 8.1x 7.6x 6.2x 5.9x 0.50x 0.50x 5.5% 7.4% 3.0% 3.1% 11.8% 1.2

Indra IDR.MC U EUR 10.8 8.0 1,760 2,295 11.5x 10.5x 9.5x 9.7x 8.0x 8.2x 0.80x 0.84x 0.8% 3.5% 4.9% 4.7% -3.7% NA

Steria TERI.PA O EUR 15.1 19.0 453 581 7.9x 7.1x 7.9x 6.1x 4.9x 4.1x 0.44x 0.38x 3.2% 10.1% 1.3% 1.3% -4.1% NA

Tieto TIE1V.HE U EUR 15.6 15.0 1,122 1,210 15.1x 13.3x 9.9x 9.2x 5.5x 5.3x 0.60x 0.61x 7.9% 6.6% 5.2% 5.1% 16.7% 0.9

MEAN 2,776 2,787 12.8x 11.2x 8.9x 8.0x 6.0x 5.6x 0.57x 0.56x 4.6% 7.2% 3.0% 3.0% 11.3% 0.9

MEDIAN 1,760 2,295 14.5x 12.1x 9.2x 7.6x 5.5x 5.3x 0.53x 0.50x 5.3% 7.4% 3.0% 3.1% 11.8% 0.9

FCF Yield Dividend YieldP/E EV/EBIT EV/EBITDA EV/Sales

Services: Valuation Multiples: MS For Consensus Data

2 3 4 5 6 7 8 9 10 13 14 17 18 19 20 23 24 25 26 27 28


TargetMkt Cap in € mn

EV in € mn

EPS CAGR

PEG

8-Jan 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2012 e 2013 e 2011 - 13 2012 e

EUROPEAN SERVICES

Atos ATOS.PA E EUR 53.2 56 5,108 4,844 13.1x 10.5x 8.0x 6.3x 5.4x 4.5x 0.53x 0.48x 5.3% 8.4% 0.8% 0.8% 25.9% 0.5

Capgemini CAPP.PA E EUR 33.5 36.0 5,437 5,005 11.8x 10.8x 6.6x 6.3x 6.2x 5.9x 0.50x 0.50x 5.5% 7.4% 3.0% 3.1% 8.0% 1.5

Indra IDR.MC U EUR 10.8 8.0 1,760 2,295 11.5x 10.5x 9.5x 9.7x 8.0x 8.2x 0.80x 0.84x 0.8% 3.5% 4.9% 4.7% -3.7% NA

Steria TERI.PA O EUR 15.1 19.0 453 581 7.5x 6.2x 7.1x 5.5x 4.8x 4.0x 0.44x 0.38x 3.2% 10.1% 1.3% 1.3% -1.8% NA

Tieto TIE1V.HE U EUR 15.6 15.0 1,122 1,210 12.5x 11.2x 8.3x 7.8x 5.5x 5.3x 0.60x 0.61x 7.9% 6.6% 5.2% 5.1% 13.8% 0.9

MEAN 2,776 2,787 11.3x 9.8x 7.9x 7.1x 6.0x 5.6x 0.6x 0.6x 4.6% 7.2% 3.0% 3.0% 8.4% 1.0

MEDIAN 1,760 2,295 11.8x 10.5x 8.0x 6.3x 5.5x 5.3x 0.5x 0.5x 5.3% 7.4% 3.0% 3.1% 8.0% 0.9

EV/Sales FCF Yield Dividend YieldP/E EV/EBIT EV/EBITDA


19



Amadeus (AMA.MC, OW, PT €21, up from €18)

Attractive risk-reward, transaction based model limits downside

WARNINGDONOTEDIT_RRS4RL~AMA.MC~

€21.00 (+11%)€ 18.88

€14.00 (-26%)

€26.00 (+38%)

0

5

10

15

20

25

30

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

€

Price Target (Jan-14) Historical Stock Performance Current Stock Price Source: Thomson Reuters (historical share price data), Morgan Stanley Research estimates

Price Target €21 Based on Base Case Fair Value; WACC = 8%. We use a SOTP valuation methodology to better reflect Amadeus’ business.

Bull Case €26 (up from €24)

2015 Bull Case P/E of 11x GDS and 2015 16x IT Solns, discounted by 1 year by WACC

New IT Solutions wins drive Bull: • IT Solns contribution margin rises to 74.5% in 2015. GDS

contribution declines to 44% by 2015. • A large contract win in the US increases PB numbers in IT

Solns, and macro improvements push air traffic increases.

• GDS 2015 EPS of €0.98, IT Solns 2015 EPS of €1.00, P/E multiples of 11x for GDS and 16 for IT Solutions.

Base Case €21 (up from €17.8)

2015 Base Case P/E of 11x GDS and 16x IT Solns, discounted by 1 year by WACC

Contracted migrations and constant contributions drive Base: • IT Solutions grows inline with projected PBs, based on

contracted migrations and IATA projected traffic growth. Disintermediation impacts channel share by -2% in GDS and bookings grow c. 3% per year.

• GDS contribution declines to 43% to 2015; IT Solutions remains at 72.6%.

• GDS 2015 EPS €0.84, IT Solns 2015 EPS €0.81, WACC 8%, P/E multiples of 11x and 16x for GDS and IT Solns.

Bear Case €14 (up from €12.3)

2014 Bear Case EV/Sales multiple of 4.5x on ITS; DCF of the GDS

Global travel declines in 2013, trough EV/EBITDA reached: • Rising disintermediation at c. -3% per year and weak

macro impacts GDS volumes. IT Solutions migrate signed contracts, but no new wins.

• We value the IT Solutions business on a trough multiple of 4.5x 2014 bear case revenues €872m.

• We value GDS assuming -3% growth rate on a terminal value DCF.

Why Overweight? • Structural and visible growth in IT

Solutions: Contracted airline

migrations provide good revenue

visibility and will take total Altéa

Passengers Boarded to 760m+ by

2014 from 439m in 2011.

• Significant upside still in IT

Solutions from 1) up-selling existing

airlines to full Altea suite, 2) signing

new airlines to Altea, 3) selling new

airline IT modules to airlines and 4)

new offerings in Hotels, Airports and

Rail IT.

• Transaction-based business model

limits downside risk to estimates:

Revenues are per transaction, making

them less exposed to cycle peaks and

troughs. Virtuous network effect in

GDS creates growth pains for

entrants.

• Valuation Attractive: Trading at

13.7x 2013e P/E vs. European

Software at 17.9x. 2013e FCF yield

~6%. Leverage position improving.

Key Value Drivers

• Altéa migrations: new contract wins.

• Upsell of solutions: to existing

customers.

Risks to our PT

• Disintermediation: Consumers

moving to more direct mode of

booking, bypassing GDS.

• Macro impacts passenger volumes:

Especially in developed markets.

• Pricing: Declines in fees/booking in

GDS.

• Reputation risk: IT outages are

public.

Potential Catalysts

• 4Q/FY Results

• Monthly Travel Trends: IATA, AEA

and GDP projections

• New Contract wins/migrations in Altéa

20



Amadeus Models

Exhibit 40

Amadeus Profit and Loss Account Profit and Loss Accountyear ended 31 December Reported IFRIC Adj.In € millions 2008 2009 2009 2010 2011 2012e 2013e 2014e Q1 2012 Q2 2012 Q3 2012 Q4 2012eDistribution 1,931 1,836 1,836 1,992 2,079 2,199 2,272 2,352 598 560 533 509IT Solutions 500 548 511 601 628 721 794 905 167 185 191 178Opodo 90 99 99 0 0 0 0 0 0 0 0 0Eliminations -16 -21 -21 0 0 0 0 0 0 0 0 0Revenues 2,505 2,461 2,425 2,594 2,707 2,920 3,066 3,257 764 745 724 687 - % chg y/y -3% -2% -3% 7% 4% 8% 5% 6% 8% 9% 8% 6% - % chg y/y organic 2% -2% nm 7% 4% 8% 5% 6% 8% 9% 8% 6%

Distribution 907 873 873 926 950 979 1,000 1,023 278 264 232 204 - Contribution Margin % 47.0% 47.5% 47.5% 46.5% 45.7% 44.5% 44.0% 43.5% 46.5% 47.2% 43.6% 40.1%IT Solutions 335 350 341 410 456 523 576 657 121 136 140 127 - Contribution Margin % 67.0% 63.8% 66.8% 68.1% 72.6% 72.6% 72.6% 72.6% 72.5% 73.4% 73.2% 71.2%Contribution 1,242 1,222 1,214 1,336 1,406 1,502 1,576 1,680 399 400 372 331 - Contribution Margin % 49.6% 49.7% 50.1% 51.5% 51.9% 51.4% 51.4% 51.6% 52.2% 53.7% 51.4% 48.2%

Total Indirect Costs -371 -351 -351 -359 -367 -393 -408 -427 -91 -100 -89 -112

Amadeus EBITDA (ex Opodo) 871 871 863 977 1,039 1,109 1,167 1,253 307 300 283 219Opodo EBITDA 11 26 26 0 0 0 0 0 0 0 0 0Group EBITDA 882 897 889 977 1,039 1,109 1,167 1,253 307 300 283 219

- % chg y/y 1.0% 1.8% 0.9% 9.8% 6.4% 6.8% 5.2% 7.3% 5.5% 6.8% 7.4% 7.8%

EBITDA Margin %Amadeus (ex Opodo) 35.8% 36.5% 36.8% 37.7% 38.4% 38.0% 38.1% 38.5% 40.2% 40.2% 39.1% 31.4%Group EBITDA Margin % 35.2% 36.5% 36.7% 37.7% 38.4% 38.0% 38.1% 38.5% 40.2% 40.2% 39.1% 31.4%Extraordinary items and one-offs -8 -3 -3 -355 35 -4 0 0 0 0 0 -4Reported EBITDA 873 894 886 622 1,073 1,105 1,167 1,253 307 300 283 215Depreciation & Amortisation -158 -175 -175 -170 -192 -206 -213 -228 -44 -41 -46 -75Net Interest -265 -242 -242 -257 -195 -91 -72 -52 -21 -27 -23 -21PBT, Reported 237 372 363 61 669 721 807 899 221 218 183 99PBT Adjusted (pre-IPO costs/ PPA) 458 479 471 549 652 812 882 973 242 232 214 123Clean Taxes -142 -142 -140 -166 -163 -252 -273 -302 -75 -72 -66 -38Clean Tax Rate 31.1% 29.6% 29.6% 30.2% 25.1% 31.0% 31.0% 31.0% 28.0% 28.0% 28.0% 28.0%Associates & Minorities 7 3 3 6 -2 3 3 3 1 1 1 0Net Profit (Reported) 183 272 263 138 730 501 560 623 153 151 127 69Net Profit (Adjusted) 323 336 335 389 487 564 612 675 168 162 149 86 - % chg y/y 15% 4% nm 16% 25% 16% 9% 10% 22% 28% 9% -1%Average Basic Shares O/S 364 364 445 445 445 445 445 445 445 445 445 445Average Diluted Shares O/S 364 364 364 419 445 445 445 445 445 443 444 445Basic Reported EPS 0.50 0.75 0.72 0.33 1.64 1.12 1.26 1.40 0.34 0.34 0.29 0.15Diluted Reported EPS 0.50 0.75 0.72 0.33 1.64 1.12 1.26 1.40 0.34 0.34 0.29 0.15ModelWare EPS 0.89 0.92 0.92 0.93 1.09 1.27 1.37 1.52 0.38 0.36 0.34 0.19 - % chg y/y 14.8% 4.0% nm 1.1% 17.8% 15.7% 8.5% 10.3% 0.0% 0.0% 0.0% 0.0%Dividend per Share 0.00 0.00 0.00 0.32 0.37 0.45 0.50 0.56 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

21



Exhibit 41

Amadeus Cash Flow Statement

Cash Flow Statementyear ended 31 DecemberIn € millions 2008 2009 2010 2011 2012e 2013e 2014eOperating Profit 557 549 634 831 825 879 950Add back exceptional 0 27 39 -35 4 0 0D&A 160 176 181 241 206 213 228PPA Amortisation 156 142 162 51 75 75 75Tax -98 -118 -72 -123 -227 -273 -302Operating Cash Flow (pre WC) 776 776 944 965 882 894 951Net Working Capital Change 10 60 67 18 53 38 35Cash from Operations 785 836 1010 982 936 932 986Total Capex -266 -176 -252 -313 -315 -322 -313Cash from Ops - Capex 519 661 758 670 621 610 673Net Interest -389 -135 -251 -85 -91 -72 -52Free Cash Flow 204 415 508 481 530 538 621Proceeds from Share issues -1 0 909 0 0 0 0Investment in subsidaries and associates 40 -25 25 -11 0 0 0Net Acquisitions/Disposals 0 0 0 411 0 0 0Dividends Received 6 6 0 6 3 3 3Dividends Paid 0 0 0 -134 -166 -201 -224Cash paid to holders of equity investments -8 0 0 0 0 0 0Issue of Debt 0 0 0 0 0 0 0Class B Share redemption 0 0 -256 0 0 0 0Repayment of Debt -180 -178 -1046 -882 -150 -656 -250Net loans to third parties and affliates -1 -1 0 -10 0 0 0Net Cash on Derivative agreements 74 -110 0 -94 0 0 0Net Change in Investments/ Fixed assets 5 -1 0 -1 0 0 0Payments of finance leases and liabilities -19 -21 0 -25 0 0 0Others (IPO/LBO fees, etc) 0 -2 -399 -2 -30 0 0Net Change in Cash 45 194 -260 -158 187 -316 150

Cash at beginning of period 572 617 811 551 393 581 264Cash at end of period 617 811 551 393 581 264 414

Adjusted EBITDA 882 897 977 1,039 1,109 1,167 1,253less NWC 10 60 67 18 53 38 35less Capex -266 -176 -252 -313 -315 -322 -313Total 625 782 791 744 848 883 974Cash Conversion 71% 87% 81% 72% 76% 76% 78%

FCF for Valuation 204 415 400 490 528 538 621as % of Clean Net Income 63% 124% 120% 126% 108% 95% 101%

e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

22



Exhibit 42

Amadeus Balance Sheet

Balance Sheetyear ended 31 DecemberIn € millions 2008 2009 2010 2011 2012e 2013e 2014e

Tangible Assets 346 314 283 282 232 199 169Intangible Assets 1,802 1,681 1,642 1,778 1,850 1,917 1,958Goodwill 2,240 2,239 2,071 2,071 2,071 2,071 2,071Others 124 120 133 77 77 77 77Total Non-Current Assets 4,512 4,354 4,128 4,208 4,229 4,264 4,274

Accounts Receivables 207 250 179 204 220 231 245Others 169 148 216 239 239 239 239Cash and Cash Equivalents 617 811 551 393 581 264 414Total Current Assets 993 1,208 1,204 836 1,040 734 899

Total Assets 5,505 5,562 5,331 5,044 5,269 4,998 5,173

Accounts Payable 498 554 480 461 500 524 553Short-term debt & Fin leases 291 251 194 226 226 226 226Other current liabilities 229 215 365 331 335 360 380Total Current Liabilities 1,018 1,020 1,038 1,018 1,061 1,110 1,160

Long-Term Debt & Financial Leases 4,255 4,077 2,894 2,015 1,865 1,209 959Other non-current liabilities 771 742 633 745 742 718 695Total Non-Current Liabilities 5,027 4,819 3,526 2,760 2,607 1,927 1,654

Total Shareholders Equity -539 -278 767 1,266 1,601 1,960 2,359

Total Equity and Liabilities 5,505 5,562 5,331 5,044 5,269 4,998 5,173

Net Debt (per covenants definition) 3,714 3,289 2,571 1,852 1,437 1,097 697Reported EBITDA (ex OPODO for 2007/08) 863 894 622 1,253 1,105 1,167 1,253Clean EBITDA (ex OPODO for 2007/08) 883 904 1,012 1,103 1,109 1,167 1,253Net Debt / EBITDA (Clean) 4.2 3.6 2.5 1.679 1.295 0.940 0.556


23



Atos (ATOS.PA, EW, PT €56, up from €54)

Restructuring priced in, focus turns to Worldline

WARNINGDONOTEDIT_RRS4RL~ATOS.PA~

€56.00 (+6%)€ 52.86

€33.00 (-38%)

€71.00 (+34%)

0

10

20

30

40

50

60

70

80


€

Price Target (Jan-14) Historical Stock Performance Current Stock Price Source: Company Data, Morgan Stanley Research

Price Target €56 (up from €54)

Our price target is based on our base case valuation. We apply a 12x P/E multiple to our base case 2014e EPS to derive our €56 price target.

Bull Case €71 (unch.)

Based on SOTP: ITS= €42, SB= €6, PP=€23

Payment Processing Value unlocked: We value the business

using a sum of the parts methodology. The payment processing

business, we place a 1.5x EV/Sales multiple on FY14e sales, the

special IT Services business at a 0.55x Sales multiple; and the

remaining Atos IT Services business on a 0.45x EV/Sales multiple

(Atos’ EV/Sales multiple plus one standard deviation of the peer

mean). Summing these gives our bull case valuation of €71.

Base Case €56 (up from €54)

12x Base Case 14e EPS

Achieving the lower end of guidance targets:

In our base case we assume organic top line growth of 3% and Atos

comes in at the low end of its 2013e €9-10bn revenue target at

€9.1bn. We reach a margin (Atos basis) of 7.8% in 2014e – vs. the

7-8% guide for 2013e. This translates into MS EPS of €4.65 in 14e

after a recurrent restructuring charge (€94m). We use a 12x multiple

– the average since 2007 – and derive an implied fair value of €56.

Bear Case €33

0.3x 2014e Bear Case EV/sales

SIS turnaround is tougher in a much weaker macro: We assume that Atos misses its guidance targets as the SIS turnaround proves much more challenging in a much tougher macro. We return to an EV/sales valuation methodology which we believe is the best metric to establish trough valuations for IT Services companies. We use a 0.3x multiple (vs. 0.28x trough in 2008/9) on 2014e sales.

Why Equal-weight?

• Risk/Reward looks neutral here: We see +34% upside to the current share price for our bull case vs. -38% downside for our bear case, making the risk-reward relatively neutral.

• A more defensive, self-help story…: Between its payment processing (20% of sales) and outsourcing (54%), Atos has c. 74% recurring revenues, making it more defensive in a downturn. The merger with SIS gives significant cost reduction opportunities, irrespective of the macro.

• …but SIS synergies priced in: We believe that the market has already priced in the bulk of the benefits from the SIS restructuring. However, we also believe downside is limited as Atos has established a track record of delivering on targets, despite the 2009 recession. We think this should give the market enough reason to believe that Atos can achieve its 2013 margin guidance of 7-8%.

• Focus will turn to Worldline as the next leg. We expect Atos to refocus investors away from the SIS merger story to the value contained in Worldline.

Key Value Drivers

• Synergies: Delivery of synergies from the SIS merger to boost bottom-line growth.

Key Risks to Our Price Target

• SIS synergy delivery • Renewals of SIS loss making contracts, • General Contract Execution risks,

especially in new, large outsourcing deals • Realising value from the Worldline

business

Potential Catalysts

• Q412 Results, 21 February 2013 Source: Thomson Reuters (historical share price data), Morgan Stanley Research estimates

24



Atos Models

Exhibit 43

Atos Profit and Loss Account EURm FY FY FY FY FY FY FY FY 1H 2HY/E Dec 31 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012eRevenues 5,855 5,624 5,127 5,021 6,813 8,872 9,149 9,414 4,366 4,506YoY growth 0.0% -4.0% -8.8% -2.1% 35.7% 30.2% 3.1% 2.9% 76.3% 3.9%YoY org growth ex FX 4.5% 5.5% -3.7% -3.5% 0.3% 0.8% 3.0% 2.9% 1.4% 0.2%

Total personnel expenses -3,167 -3,064 -2,883 -2,810 -3,564 -4,725 -4,981 -5,304 -2,274 -2,452as a % of sales -54.1% -54.5% -56.2% -56.0% -52.3% -55.1% -54.4% -56.3% -52% -54%Total operating expenses -2,417 -2,294 -1,954 -1,874 -2,826 -3,558 -3,490 -3,374 -1,844 -1,715as a % of sales -41.3% -40.8% -38.1% -37.3% -41.5% -40.1% -38.1% -35.8% -42% -38%Total personnel & operating expenses -5,584 -5,357 -4,837 -4,683 -6,390 -8,284 -8,472 -8,678 -4,117 -4,166as a % of sales -95.4% -95.3% -94.3% -93.3% -93.8% -93.4% -92.6% -92.2% -94% -92%

EBIT (adjusted, pre stock options): Stated + stock options 289 280 304 349 433 604 696 754 256 348as a % of sales 4.9% 5.0% 5.9% 6.9% 6.4% 6.8% 7.6% 8.0% 5.9% 7.7%EBIT for consensus (Stated: Post options, Pre Non Op and Restructuring) 272 267 290 337 423 588 677 736 249 339Operating margin (%) 4.6% 4.7% 5.7% 6.7% 6.2% 6.6% 7.4% 7.8% 5.7% 7.5%MW EBIT (Post Options, Post recurrent restructuring, Pre non-op) 272 267 213 262 321 508 586 642 205 303as a % of sales 4.6% 4.7% 4.2% 5.2% 4.7% 5.7% 6.4% 6.8% 4.7% 6.7%Total non operating expenses -135 -166 -220 -137 -75 -114 -91 -94 -78 -36as a % of sales -2.3% -3.0% -4.3% -2.7% -1.1% -1.3% -1.0% -1.0% -1.8% -0.8%Stated operating profit 137 101 70 200 348 474 586 642 170 303Stated operating profit margin (%) 2.3% 1.8% 1.4% 4.0% 5.1% 5.3% 6.4% 6.8% 3.9% 6.7%

Total financial income & expense -14 -23 -24 -24 -35 -42 -35 -29 -20 -22

Stated PBT 123 78 45 176 313 432 551 612 151 281Adjusted PBT 258 244 266 313 388 546 643 706 229 317MS PBT (for MW) 258 244 189 238 285 467 551 612 185 281

Stated income tax expense -60 -48 -9 -58 -129 -135 -163 -181 -48 -87Stated tax rate 48.7% 61.9% 20.8% 32.8% 41.3% 31.2% 29.5% 29.5% 31.7% 31.0%Income tax expense for consensus 72 68 -66 -93 -116 -170 -190 -208 -72 -98Consensus tax rate 28.0% 28.0% 24.7% 29.7% 29.8% 31.1% 29.5% 29.5% 31.5% 30.8%Income tax expense for MS (MW) 72 68 -47 -71 -85 -145 -163 -181 -58 -87MS/MW tax rate 28.0% 28.0% 24.7% 29.7% 29.8% 31.1% 29.5% 29.5% 31.5% 30.8%Minorities 15 7 -4 -2 -1 -4 4 2 -3 -1

Stated Net Income (group share) 63 30 32 116 182 295 392 434 102 193Net Income for consensus 0 0 196 218 271 374 457 500 156 219MS Net Income 0 0 138 165 199 319 392 434 126 194

Convertible bond interest (net of tax) 0 0 1 9 12 16 16 16 8 8

Stated Net Income - adj. for convert interest net of tax 0 0 33 125 194 311 408 450 110 201Net Income for consensus - adj. for convert interest net of tax 0 0 197 227 283 390 473 516 164 227MS Net Income - adj. for convert interest net of tax 0 0 139 174 211 335 408 450 134 202

Basic Stated EPS (basic) 1.67 2.40 3.53 4.69 5.16 1.22 2.31EPS for consensus (basic) 3.15 3.56 4.48 5.46 5.95 1.87 2.62MS EPS (basic) 2.38 2.62 3.83 4.69 5.16 1.51 2.32

Diluted (MS measure)Stated EPS (diluted) 1.64 2.20 3.24 4.24 4.65 1.14 2.09EPS for consensus (diluted) 2.99 3.21 4.06 4.91 5.34 1.71 2.36MS EPS 2.29 2.39 3.49 4.24 4.65 1.39 2.10 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

25



Exhibit 44

Atos Cash Flow Statement EURm FY FY FY FY FY FY FY FY 1H 2HY/E Dec 31 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012e

Stated profit before tax 123 78 45 176 313 432 565 625 151 281

- Depreciation of fixed assets 0 0 175 183 280 342 348 358 175 167 - Amortisation of intangible assets 0 0 52 31 19 36 32 32 20 16Depreciation 223 241 222 214 299 378 380 390 195 183Net charge / (release) to operating provisions -18 -48 -34 -42 -84 -141 -20 0 -91 -50Net charge / (release) to financial provisions -18 -18 7 8 9 3 0 0 3 0Net charge / (release) to other operating provisions -9 -85 45 -85 -122 -60 -5 0 -35 -25Impairment of LT Assets 47 226 31 25 0 0 0 0 0 0Net accrual to other operating expenses 0 0 0 0 0 0 0 0 0 0Losses / (Gains) on fixed asset disposal -32 -141 6 4 -0 -2 0 0 -2 0Charge for stock based compensation 19 15 15 12 11 16 18 19 7 9Losses / (Gains) on financial instruments -1 2 -2 1 4 -0 0 0 -0 0Net cost of financial debt - P&L 29 29 14 18 28 33 29 23 17 17Cash from Operations before tax, interest, W/C change 363 298 348 329 457 660 966 1,057 245 415

Cash Taxes paid -48 -50 -40 -62 -60 -118 -167 -184 -31 -87as a % of P&L item 0 0 420% 106% 46% 87% 100% 100% 65% 100%Change in net working capital 30 -86 35 53 98 90 -36 -32 58 32

Cash from Operations before interest 344 161 343 321 496 632 764 841 272 360

Net cost of financial debt paid (cash) 0 0 -13 -5 -16 -30 -29 -23 -13 -17Cash from Operations 344 161 330 316 480 602 735 817 260 343

Total Capex -323 -261 -205 -187 -253 -354 -373 -436 -155 -198Disposals of tangible and intangible assets 22 27 7 11 4 24 0 0 24 0Acquisitions -7 -8 -17 -160 -428 71 0 0 86 -15Cash in companies acquired 0 0 1 2 217 0 0 0 0 0Proceeds from disposals of financial investments 28 292 3 6 1 13 0 0 13 0Cash in companies sold -6 -145 -2 -0 0 -0 0 0 -0 0Cash used in Investing -285 -95 -212 -329 -457 -246 -373 -436 -32 -213

Stock issued 26 0 0 4 32 10 0 0 10 0Purchase and sale of treasury stock -21 -15 6 3 0 0 0 0 0 0Dividends to non controlling interest -3 -4 -4 -5 -2 0 0 0 0 0Dividends to stockholders 0 -28 0 0 -35 0 -35 -35 0 0Other 1 -29 -29 43 0 0 0 0 0 0 0Cash used in Financing -27 -76 44 3 -5 10 -35 -35 10 0

FX impact -2 -24 -1 4 -25 5 0 0 5 0Other -9 67 3 7 4 0 0 0 0 0

Change in net debt 22 34 165 0 -3 371 327 347 242 129

Change in cash & cash equivalents -115 -86 249 -113 345 307 127 247 278 29 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

26



Exhibit 45

Atos Balance Sheet EURm FY FY FY FY FY FY FY FY 1H 2HY/E Dec 31 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012e

Net Working Capital -153 -75 -121 -153 -629 -703 -667 -635 -671 -703As a % of Sales -3% -1% -2% -3% -9% -8% -7% -7% -15% -16%

Net Goodwill 1,868 1,511 1,508 1,610 1,982 1,966 1,966 1,966 1,966 1,966Net Intangible assets 75 78 69 76 472 483 511 539 466 483Net TFA 437 454 407 396 680 696 662 679 683 696Non current financial assets 71 69 138 231 580 470 470 470 470 470Non current financial instruments 469 0 1 0 0 0 0 0 0 0Deferred tax assets 247 208 208 322 381 436 436 436 436 436

Net capital employed 3,014 2,245 2,210 2,482 3,467 3,349 3,378 3,456 3,350 3,349

Net Cash/(Debt) -338 -304 -139 -139 -142 230 547 885 101 230

Pension liability -395 -222 -223 -501 -572 -662 -662 -662 -662 -662LT provisions -101 -100 -127 -96 -162 -74 -49 -49 -149 -74Deferred tax liability -69 -70 -61 -99 -245 -277 -277 -277 -277 -277Non current financial instruments -246 -6 -4 -2 -6 -6 -6 -6 -6 -6Other non current liabilities -1 -1 -1 -14 -12 -11 -11 -11 -11 -11

Shareholder's Equity 1,692 1,531 1,644 1,626 2,323 2,516 2,892 3,309 2,314 2,516

Minority Interests -173 -11 -10 -5 -6 -32 -28 -26 -31 -32 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

27



Aveva (AVV.L, OW, PT £24.0, up from £20.7)

Value of rentals drives OW

WARNINGDONOTEDIT_RRS4RL~AVV.L~

2,400p (+12%)2,148p

1,300p (-39%)

3,300p (+54%)

0

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1,500

2,000

2,500

3,000

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p


Price Target £24.00 (up from £20.70)

We convert rental incomes to a licence model basis to make Aveva revenues consistent with peers. We place the Base case adjusted EPS on a 21.5x P/E multiple, which is the average P/E multiple of thestock since 2007. Our valuation is therefore based on the average multiple of the last 5 years, applied to EPS adjusted to an up-front licence model.

Bull Case £33.00 (up from £28)

25x Bull Case CY14e EPS adj. for rental model

Oil/Gas demand & Power capacity drive an investment cycle. Our bull case assumes that funding is not an issue for major power generation projects and that oil/gas exploration is driven by a rising crude oil price. There is some recovery in marine to give overall revenue growth of +17% in FY14 and +16% in FY15. Rental revenues are placed on a licence revenue basis to give us a CY14 EPS of £1.31, and make earnings consistent with peers. We place this on a 25x multiple (historical mean since 2007, plus one standarddeviation of this mean).

Base Case £24.0 (up from £20.70)

21.5x Base Case CY14e EPS adj. for rental model

Solid growth with some funding constraints. Our base case assumes overall revenue growth of +13% for FY14/15, then converts new rental revenues onto a licence revenue basis, consistent with peers. We expect margins of 32.4% in FY14 and 33.6% in FY14, to give us a CY14e EPS of £1.10. We place this on a 21.5x multiple, the historical mean since 2007.

Bear Case £13 (up from £11)

4x Bear Case CY14e EV/ Recurring

Funding an issue, commodity prices weak. Our bear case scenario assumes that the crude price remains strong enough to drive some investment but that this is limited. We assume an EV/Recurring Revenue trough multiple of 4x to reach our bear case valuation of £13.

Source: Thomson Reuters (historical share price data), Morgan Stanley Research estimates

Why Overweight?

• A major new product cycle with Everything 3D for core 3D design.

• Growth in oil & gas – Aveva’s design software is used for designing oil rigs & drilling platforms – the more exploration, the more software.

• A play on power generation capacity – Clean supply & capacity shortages are a driver in the developed world; emerging market demand is increasing rapidly, and nuclear is one of Aveva’s growing sectors.

• 70% of Aveva’s revenue is recurring, giving a much more stable base than peers, and 60% of revenues are from Emerging Markets, giving growth prospects.

• Aveva NET, for plant data management, is driven by regulation, so owner-operators have electronic access to data.

Risks to our price target

• Long-term weakness in marine (shipbuilding) could put pressure on recurring revenues in that sector.

• Market demand is partly commodity price based, so is highly volatile, and could lead to short-term disappointment.

• Aveva projects (e.g. nuclear plants) are very large, so funding and timing of decisions could be a factor.

• Customers could cancel rental payments more easily than a maintenance payment.

Upside drivers

• Rising commodity prices (i.e. oil)

• Recovery in shipbuilding from scrappage of older vessels

• Nuclear plant announcements (particularly in China)

Potential Catalysts

• Oil price movements

• Regulatory changes in oil exploration

28



Aveva Models

Exhibit 46

Aveva Profit and Loss Account FY FY FY FY FY FY FY FY 1H 2H£m, YE 31 Mar 2008 2009 2010 2011 2012 2013e 2014e 2015e 2013 2013eUp-front licences 52.9 57.7 35.1 41.0 37.3 43.5 49.7 56.2 19.5 24.0Maintenance fees 23.1 33.9 40.4 45.7 47.8 53.4 58.0 63.8 25.8 27.6Rental fees 40.6 57.7 61.2 71.3 90.1 102.6 116.9 133.3 41.3 61.3Recurring services 2.4 2.6 1.1 0.2 0.0 0.0 0.1 0.1 0.0 0.0Other services 8.6 12.1 10.5 15.8 20.8 24.2 29.0 33.2 11.0 13.2Revenue 127.6 164.0 148.3 174.0 195.9 223.6 253.8 286.6 97.6 126.0y-o-y change % 34 29 (10) 17 13 14 13 13 15 14organic growth % 36 14 (15) 13 11 14 13 13 13 14Stated Gross profit (on new basis for FY11 onwards) 97.8 126.4 118.0 155.2 179.9 206.4 234.0 264.2 90.2 116.2as % of sales 76.6 77.1 79.5 89.2 91.8 92.3 92.2 92.2 92.4 92.2R&D (New basis for FY11 onwards) (21.3) (27.3) (20.9) (28.1) (32.1) (34.0) (38.0) (41.6) (16.2) (17.8)S&M (New basis for FY11 onwards) (39.0) (53.2) (60.0) (62.7) (75.0) (88.3) (97.6) (109.2) (40.5) (47.9)G&A (New basis for FY11 onwards) (15.6) (16.5) (8.7) (15.3) (16.2) (18.4) (19.7) (20.6) (8.3) (10.1)Operating expenses (75.9) (97.1) (89.6) (106.1) (123.4) (140.7) (155.3) (171.4) (65.0) (75.7)Stated EBIT 43.2 56.6 49.2 49.2 56.5 65.7 78.7 92.9 25.2 40.5Amortisation of intangible (2.3) (2.5) (1.7) (2.8) (3.4) (3.7) (3.4) (3.4) (1.9) (1.9)Other restructuring/exceptionals (0.4) 0.0 1.7 (0.6) (0.5) (0.6) 0.0 0.0 (0.6) 0.0Adjusted MS EBITA (post options) 45.8 59.1 49.1 52.5 60.4 70.0 82.1 96.3 27.6 42.3as a % of sales 35.9 36.0 33.1 30.2 30.8 31.3 32.4 33.6 28.3 33.6Stock Option expenses (0.3) (0.9) (1.2) (1.5) (0.7) (0.8) (0.9) (1.1) (0.4) (0.4)Aveva EBITA (pre options / for Cons) 46.1 60.1 50.3 54.1 61.0 70.8 83.0 97.3 28.0 42.7as a % of sales 36.2 36.6 33.9 31.1 31.2 31.6 32.7 34.0 28.7 33.9Net Interest 1.8 2.6 0.4 0.6 1.2 1.6 2.0 2.5 0.6 1.0Stated PBT 45.0 59.2 49.6 49.8 57.7 67.3 80.7 95.4 25.8 41.5MS adjusted PBT 47.6 61.7 49.5 53.2 61.6 71.6 84.1 98.8 28.3 43.3Aveva adjusted PBT 47.9 62.6 50.7 54.7 62.3 72.4 85.0 99.8 28.7 43.7Stated tax (10.7) (17.0) (16.1) (15.3) (17.8) (19.5) (23.4) (27.7) (7.5) (12.0)MS tax (13.8) (16.8) (15.8) (16.2) (18.7) (20.6) (24.4) (28.6) (8.0) (12.6)Aveva tax (13.8) (17.0) (16.2) (16.7) (19.0) (20.8) (24.7) (29.0) (8.2) (12.7)Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Stated net income 34.2 42.2 33.4 34.5 40.0 47.8 57.3 67.7 18.4 29.4MS / ModelWare Net Income (post options) 33.9 44.9 33.7 37.0 42.9 51.0 59.7 70.1 20.2 30.8Aveva adjusted Net Income 34.1 45.6 34.5 38.0 43.3 51.5 60.4 70.9 20.5 31.0Stated basic EPS (p) 50.8 62.3 49.4 50.9 58.9 69.2 81.5 94.7 27.0 42.4Stated diluted EPS (p) 50.4 62.0 49.1 50.6 58.7 69.0 81.1 93.7 27.0 42.4MW EPS (diluted) (p) 49.8 66.0 49.4 54.2 63.0 73.6 84.5 97.0 29.7 44.3% change 78 32 (25) 10 16 17 15 15 10 23Aveva adjusted EPS (basic) (p) 50.6 67.3 50.9 56.1 63.8 74.6 85.9 99.2 30.2 44.7Aveva adjusted EPS (diluted) (p) 50.2 67.0 50.6 55.8 63.7 74.4 85.4 98.1 30.1 44.7% change 78 34 (24) 10 14 17 15 15 12 21

Shares in issue (m) 67.4 67.7 67.7 67.8 67.9 69.1 70.3 71.5 67.9 69.4Fully diluted shares in issue (m) 68.0 68.0 68.1 68.2 68.1 69.3 70.7 72.3 68.1 69.5Dividend per share 6.7 9.4 16.9 18.3 21.1 23.2 27.0 31.4 4.5 18.7 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

29



Exhibit 47

Aveva Balance Sheet YE 31 Mar FY FY FY FY FY FY FY FY 1H 2HGBPm 2008 2009 2010 2011 2012 2013e 2014e 2015e 2013 2013e

Net working capital (8.8) (10.3) (7.0) (3.3) (8.1) (5.7) (5.1) (4.4) (3.4) (5.7)as % of sales (6.9) (6.3) (4.7) (1.9) (4.1) (2.5) (2.0) (1.5) (3.5) (4.5)

Net fixed assets 5.4 8.1 7.6 7.7 8.0 9.2 9.8 10.5 9.0 9.2Net Goodwill 16.7 17.1 18.2 27.5 30.8 39.4 39.4 39.4 39.4 39.4Net intangibles 10.8 10.8 10.6 18.7 18.6 22.4 19.0 15.6 24.3 22.4Deferred tax assets 2.7 5.5 5.0 3.6 4.0 4.2 4.2 4.2 4.2 4.2Other non current asset 0.7 0.8 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8Net capital employed 27.6 32.0 35.0 55.1 54.2 70.4 68.1 66.2 74.3 70.4

Net Cash (net debt) 81.8 121.5 148.7 153.1 179.0 197.3 241.1 289.7 166.4 197.3

Deferred tax liabilities (2.1) (1.6) (1.4) (2.8) (1.9) (3.3) (2.4) (2.4) (3.3) (3.3)Retirement benefit obligations (1.6) (8.8) (13.1) (3.0) (9.9) (12.1) (12.1) (12.1) (12.1) (12.1)Provisions 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Shareholders Equity 105.7 143.1 169.2 202.4 221.5 252.2 294.7 341.3 225.3 252.2Minorities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

Exhibit 48

Aveva Cash Flow Statement YE 31 Mar FY FY FY FY FY FY FY FY 1H 2H H1 H2 H1 H2GBPm 2008 2009 2010 2011 2012 2013e 2014e 2015e 2013 2013e 2009 2009 2010 2010

Profit from the year 34.2 42.2 33.4 34.5 40.0 47.8 57.3 67.7 18.4 29.4 20.6 21.5 15.6 17.9Income tax 10.7 17.0 16.1 15.3 17.8 19.5 23.4 27.7 7.5 12.0 8.6 8.4 7.7 8.4Net finance revenue (1.8) (2.6) (0.4) (0.6) (1.2) (1.6) (2.0) (2.5) (0.6) (1.0) (1.5) (1.0) (0.0) (0.3)Depreciation & Amortisation 4.0 4.1 3.7 4.8 5.6 6.3 6.5 6.9 3.1 3.2Profit on disposal of non-current assets 0.0 0.0 0.0 (0.0) 0.0 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0Share-based payments 0.3 0.9 1.2 1.5 0.7 0.8 0.9 1.1 0.4 0.4 0.5 0.4 0.6 0.6Changes in net working capital 7.0 (2.4) (5.0) (8.4) 2.3 (3.9) (0.5) (0.8) (6.2) 2.3 (3.0) 0.6 (1.2) (3.8)Income tax paid (11.3) (15.1) (22.1) (13.9) (16.9) (21.4) (24.3) (27.7) (9.4) (12.0) (5.9) (9.2) (10.7) (11.4)Others 0.1 (0.6) (1.4) (2.3) (0.4) 0.2 0.0 0.0 0.2 0.0 (0.1) (0.5) (0.3) (1.1)Cash from operating activities 43.3 43.6 25.6 30.8 47.8 47.8 61.2 72.3 13.5 34.3 19.3 20.2 11.7 10.2

Purchase of PPE (net) (1.7) (3.6) (1.4) (2.0) (2.5) (3.2) (3.7) (4.1) (1.7) (1.5) (1.7) (2.0) (0.7) (0.7)Purchases of intangibles (0.1) (0.1) (1.3) (0.5) (0.6) (0.7) 0.0 0.0 (0.7) 0.0 (0.0) (0.0) (0.0) (1.3)Interest received 1.8 2.8 1.1 1.2 1.5 1.8 2.0 2.5 0.8 1.0 1.7 1.1 0.4 0.7Acquisitions 0.0 (1.7) 0.0 (13.4) (5.7) (11.5) 0.0 0.0 (11.5) 0.0 0.0 (1.7) 0.0 0.0Cash from investing activities (0.1) (2.5) (1.6) (14.7) (7.4) (13.5) (1.7) (1.6) (13.0) (0.5) (0.0) (2.5) (0.3) (1.3)

Interest paid (0.0) (0.0) (0.0) (0.0) (0.0) (0.1) 0.0 0.0 (0.1) 0.0 (0.0) 0.0 (0.0) (0.0)Proceeds from the issue of shares 0.1 0.2 (0.5) (0.4) (0.6) (0.5) 0.3 0.3 (0.6) 0.2 0.1 0.0 0.0 (0.5)Payments of finance lease liabilities (0.1) (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.1) (0.1) 0.0 0.0Dividends (3.1) (5.3) (6.4) (11.7) (12.8) (14.6) (16.0) (22.4) (11.5) (3.1) (3.4) (1.9) (4.4) (2.0)Proceeds from sale and leaseback 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Cash from financing activities (3.1) (5.3) (7.0) (12.1) (13.4) (15.1) (15.7) (22.1) (12.2) (2.9) (3.3) (2.0) (4.4) (2.6)

Effect of exchange rate changes 1.5 7.6 6.5 (0.5) (1.2) (0.8) 0.0 0.0 (0.8) 0.0 0.1 7.5 (0.6) 7.1Other (0.8) (3.6) 3.6 0.9 0.0 0.0 0.0 0.0 0.0 0.0Change in net cash/(-debt) 40.8 39.7 27.2 4.4 25.8 18.3 43.9 48.6 (12.5) 30.8 18.0 25.3 12.4 14.8

MS Free Cash Flow 43.3 42.7 25.2 29.9 46.6 46.2 59.6 70.7 12.4 33.7 21.2 21.5 13.3 11.9 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

30



Capgemini (CAPP.PA, EW, PT €36, down from €39)

Re-rating returns focus to organic growth & margin potential

WARNINGDONOTEDIT_RRS4RL~CAPP.PA~

€36.00 (+7%)€ 33.71

€23.00 (-32%)

€52.00 (+54%)

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Price Target (Jan-14) Historical Stock Performance Current Stock Price Price Target €36 (down from €39)

Based on 2014 P/E of 13x: reflecting 1) the sector’s recent rerating and 2) a slight premium to peers given Cap’s faster growth profile.

Bull Case €52 (down from €54)

16x Bull Case 14e EPS

Cap grows quickly in a buoyant market:

FY14e EPS: €3.25 MS basis

FY14e Revenue growth: +5% organic

FY14e EBIT Margin: 7.3% MS basis, 8.7% Cap basis

In our bull case we assume that Cap’s growth momentum accelerates

with revenues of €11.3bn and an operating margin of 7.3% MS, 8.7%

Cap basis. This gives MS EPS of €3.25 (after €130m of recurring

restructuring costs). We place this EPS on a 16x multiple (Cap

average since 2007 plus one standard deviation).

Base Case €36 (down from €39)

13x Base Case 14e EPS, no value any more for the tax credit

Cap momentum solid, no significant acceleration:

FY14e EPS: €2.77 MS basis

FY14e Revenue growth: +2.5%

FY14e EBIT Margin: 6.6% MS basis, 8.0% Cap basis

In our base case we assume revenues of €10.8bn and margin (MS

basis) of 6.8% in 2014e. This translates into MS EPS of €2.77 after a

recurrent restructuring charge (€130m). We use a 13x multiple – the

average since 2007 – and derive an implied fair value of €36. We no

longer add value for the tax credit as the value of this is broadly offset

by pension liabilities.

Bear Case €23 (up from €22)

0.3x Bear Case 14e EV/Sales +

Recovery slower than expected:

FY14e Revenue growth: +0% organic after -1% in 13e.

Margin falls to 5.6% MS basis, 7.0% Cap basis

We return to an EV/sales valuation methodology which we believe is

the best metric to establish trough valuations for IT Services

companies. We use a 0.3x multiple on 2014e sales

Why Equal-weight?

• Limited margin expansion: We see margin expansion as the key driver of EPS growth for the services names in 2013 and beyond and we do not see the drivers for a significant move in margins at Capgemini.

• Organic growth profile priced in: We expect organic topline growth to be limited (low single digit) and believe this organic growth potential is accounted for in Capgemini’s current share price.

• Less room for re-rating: Cap has now moved well off its trough valuation level and given the rerating this year, the lack of organic growth potential and the limited margin expansion for FY13, we see less room for further re-rating.

• Cashflow not sufficient to change the portfolio: We believe Cap’s focus on portfolio improvement is sensible but the cash generation vs. scale of the group limits how much transformation can come from M&A.

Key Value Drivers

• IT budgets/macro: IT services health is linked to business capex / confidence (ISM / IFO etc.).

• Cap’s cash gives some potential to make acquisitions. If priced correctly, these could be accretive, particularly in the US from the tax benefit they hold there.

Risks to Price Target

• Macro: If confidence rolls over, we would revert to the bear case.

• Contract execution risk is quite high.

Potential Catalysts

• Q4 Results in early 2013 (tbc)

Source: FactSet (historical share price data), Morgan Stanley Research estimates

31



Capgemini Models

Exhibit 49

Capgemini profit and loss account Y/E Dec 31 FY FY FY FY FY FY FY FY 1H 2HEURm 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012eRevenues 8,703 8,710 8,371 8,697 9,693 10,303 10,520 10,848 5,150 5,153YoY growth 13.0% 0.1% -3.9% 3.9% 11.5% 6.3% 2.1% 3.1% 8.3% 4.4%YoY org growth ex FX 9.0% 5.0% -5.5% -1.0% 5.6% 1.6% 2.2% 3.0% 2.3% 0.8%

Total operating expenses -8,063 -7,966 -7,776 -8,110 -8,980 -9,519 -9,693 -9,966 -4,822 -4,697% of Revenues -92.6% -91.5% -92.9% -93.3% -92.6% -92.4% -92.1% -91.9% -93.6% -91.2%

EBITDA for consensus 851 957 804 810 931 978 1,025 1,086 478 500EBITDA margin (%) 9.8% 11.0% 9.6% 9.3% 9.6% 9.5% 9.7% 10.0% 9.3% 9.7%EBIT for consensus 640 744 595 587 713 784 827 882 328 456Operating margin (%) 7.4% 8.5% 7.1% 6.7% 7.4% 7.6% 7.9% 8.1% 6.4% 8.8%Stated operating profit 493 586 333 489 595 582 714 733 237 345Stated operating margin (%) 5.7% 6.7% 4.0% 5.6% 6.1% 5.6% 6.8% 6.8% 4.6% 6.7%MS EBIT 518 622 476 467 580 642 683 733 259 383MS Operating Margin (%) 5.9% 7.1% 5.7% 5.4% 6.0% 6.2% 6.5% 6.8% 5.0% 7.4%

Net financial expense -7 -19 -93 -87 -105 -104 -80 -38 -49 -55

Stated PBT 486 567 240 402 490 478 634 695 188 290Adjusted PBT 611 703 483 484 591 662 729 825 272 390MS PBT 511 603 383 380 475 538 603 695 210 328

Income tax expense -48 -116 -61 -124 -101 -158 -209 -229 -55 -103Stated tax rate -9.9% -20.5% -25.4% -30.8% -20.6% -33.0% -33.0% -33.0% -29.3% -35.4%Income tax expense for cons -192 -211 -150 -145 -195 -218 -241 -272 -90 -129Tax rate for cons -31.5% -30.0% -31.0% -30.0% -33.0% -33.0% -33.0% -33.0% -33.0% -33.0%MS tax expense for cons -161 -181 -119 -114 -157 -178 -199 -229 -69 -108MS tax rate -31.5% -30.0% -31.0% -30.0% -33.0% -33.0% -33.0% -33.0% -33.0% -33.0%

Stated net profit 440 451 178 278 389 319 425 466 132 187Minority interests -- -- -- 2 15 11 -- -- 11 --

SharecountCAP - Weighted average number of ordinary shares 145 143 145 153 154 156 158 160 154 156MS Average number of shares (diluted) 147 145 162 154 155 158 161 163 155 158

Basic Stated net income (group share) 440 451 178 280 404 330 425 466 143 187Net Income for consensus 421 501 336 338 410 443 488 553 184 260MS Net Income 352 421 262 266 318 360 403 466 140 220Diluted (MS measure)Stated net income (group share) 440 451 194 280 404 330 425 466 143 187Net Income for consensus 421 501 352 338 410 443 488 553 184 260MS Net Income 352 421 278 266 318 360 403 466 140 220

Stated EPS (diluted) 2.99 3.12 1.20 1.82 2.61 2.09 2.64 2.86 0.92 1.18EPS for consensus (diluted) 2.86 3.46 2.17 2.20 2.65 2.80 3.03 3.40 1.19 1.65MW EPS 2.39 2.91 1.71 1.73 2.05 2.28 2.50 2.86 0.90 1.39

DPS 1.00 1.00 0.80 1.00 0.99 0.99 1.04 1.10YoY growth 0% -20% 25% -1% 0% 5% 5%Payout ratio (%) 33% 32% 69% 56% 38% 48% 40%


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Exhibit 50

Capgemini Cash Flow Statement EURm FY FY FY FY FY FY FY FY 1H 2HCashFlow Statement 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012e

Stated net profit 440 451 178 278 389 319 414 451 132 187

Impairment of goodwill -- 24 12 -- -- -- -- -- -- --Net charges to provisions -27 -62 -54 -2 -33 -16 -- -- -16 --Gains and losses on asset disposals 5 3 4 5 13 2 -- -- 2 --Income tax expense 48 116 61 124 101 158 204 222 55 103Net finance costs 4 -2 43 54 65 64 70 28 29 35Employee stock options 22 22 19 16 17 18 18 19 7 11Other non cash items 1 -17 18 -23 2 16 -- -- 16 --Impairement of fixed assets -- -- -- 1 1 -- -- -- -- --

D&A 192 213 164 177 188 199 204 214 114 85D&A to Sales -2% -2% -2% -2% -2% -2% -2% -2% -2% -2%

Operating cashflow pre OWC 685 748 445 630 743 760 910 934 339 421% of Sales -2.2% -2.4% -2.0% -2.0% -1.9% -1.8% -1.8% -1.8% -2% -2%

Change in operating working capital -109 -106 106 -73 -290 -68 -105 -47 -442 374Change in operating working capital (excl. restructuring -100 -92 77 -14 -289 -68 4 -82 -447 379

CFO pre tax and net interest paid 576 642 551 557 453 691 806 886 -103 794Cash conversion (as % of EBITDA) 68% 67% 69% 69% 49% 71% 80% -22% 159%

Income tax paid -79 -94 -56 -52 -104 -161 -173 -189 -84 -77Net Interest (paid)/ received -4 2 -4 -11 -- -29 -51 -48 -- -29Cashflow from operations 493 550 491 494 349 502 581 650 -187 689

84%Capex net of proceeds -144 -114 -95 -133 -155 -219 -230 -243 -101 -118Disposals (Acquisitions) -900 -267 -11 -218 -554 -4 -- -- -4 --Other 63 -15 -2 -82 -- -- -- -- -- --Cashflow from investing -981 -396 -108 -433 -709 -223 -230 -243 -105 -118

Free CashFlow excl. M&A 349 436 396 361 194 283 351 407 -288 571as % of net income 79% 97% 222% 129% 48% 86% 85% 90% -201% 305%

Proceeds from issue of share capital 34 10 225 46 -- -- -- -- -- --Dividend paid -101 -143 -143 -122 -154 -154 -158 -- -154 --Net proceeds/payments relating to treasury share trans 1 -75 8 -1 -7 5 -- -- 5 --Convertible through equity -- -- 59 -- -- -- -- -- -- --Cashflow from Financing -66 -208 149 -77 -161 -149 -158 -- -149 --FX on Net cash & equivalents & others -189 -61 -37 -190 -88 14 -- -- 14 --Change in net cash & equivalents -743 -115 495 -206 -609 144 193 407 -427 571

Opening net cash 1,632 889 774 1,269 1,063 454 598 790 454 27Closing net cash 889 774 1,269 1,063 454 598 790 1,197 27 598


33



Exhibit 51

Capgemini Balance Sheet EURm FY FY FY FY FY FY FY FY 1H 2HBalance Sheet 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012e

Goodwill 2,577 2,726 2,750 3,201 3,768 3,762 3,762 3,762 3,768 3,762Intangible assets 171 140 116 169 154 256 285 262 154 205PPE 442 422 421 499 547 537 535 587 547 555Total Fixed Assets 613 562 537 668 701 793 820 848 701 760

Receivables net of advances from customers 1,575 1,757 1,500 1,795 2,024 2,146 2,176 2,263 2,024 2,295Account and notes payables -2,120 -2,096 -2,026 -2,305 -2,340 -2,439 -2,364 -2,403 -2,340 -2,214Operating working capital -545 -339 -526 -510 -316 -293 -188 -141 -316 81DSO on above -23 -14 -23 -21 -12 -10 -6 -5 -12 3

Other receivables 374 223 257 346 425 470 470 470 425 470Other payables -87 -203 -95 -141 -226 -226 -226 -226 -226 -226Deferred tax assets 907 863 887 891 1,020 1,070 1,040 1,006 1,020 1,096Other non current assets 96 152 112 115 119 111 111 111 119 111Total capital employed 3,935 3,984 3,922 4,570 5,491 5,688 5,789 5,831 5,491 6,054

Long term borrowings -1,059 -987 -1,057 -1,102 -1,135 -- -- -- -1,135 -1,133Short term borrowings & overdrafts -277 -47 -278 -210 -702 -- -- -- -702 -219Total borrowings -1,336 -1,034 -1,335 -1,312 -1,837 -1,371 -1,388 -793 -1,837 -1,352ow converts -864 -891 -1,180 -1,025 -1,060 -577 -595 -- -1,060 -559ow other borrowings -472 -143 -155 -287 -777 -793 -793 -793 -777 -793Cash & cash equivalents 2,242 1,807 2,603 2,376 2,296 1,973 2,184 1,996 2,296 1,384Other including derivatives -17 1 1 -1 -5 -5 -5 -5 -5 -5Net cash (debt) 889 774 1,269 1,063 454 598 790 1,197 454 27

Deferred tax liabilities -138 -138 -153 -178 -183 -207 -207 -207 -183 -207Provision for pensions -621 -503 -680 -804 -1,099 -1,362 -1,362 -1,362 -1,099 -1,362Other provisions -85 -65 -49 -66 -63 -68 -68 -68 -63 -68Other non current liabilities -146 -112 -95 -279 -322 -338 -338 -338 -322 -338

Shareholder's Equity 3,851 3,939 4,213 4,314 4,256 4,276 4,570 5,019 4,256 4,072

Minority interests -- -- -- 7 27 39 39 39 27 39 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

34



Risk-Reward Snapshot: Dassault Systèmes (DAST.PA, OW, PT €95)

V6 cycle and high growth technology the drivers

WARNINGDONOTEDIT_RRS4RL~DAST.PA~

€95.00 (+11%)€ 85.93

€56.00 (-35%)

€115.00 (+34%)

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Price Target (Jan-14) Historical Stock Performance Current Stock Price Source: Thomson Reuters (historical share price data), Morgan Stanley Research estimates

Price Target €95 from €69 We use a base case multiple of 20x 2014e EV/FCF which is 1.3x DS’s FCF growth, in-line with US Software companies with highly recurring business models. This equates to 22.4x 2014e MS P/E, 21.7x P/E pre options which is slightly ahead of DS’s average P/E since 2003, reflecting the accelerating growth. This gives a base case PT of €95. We use 24x 2014e EV/FCF in our bull case to reflect faster FCF growth, this equates to 24.4x 14e PE (MS basis). We use 3.5x 14e EV/recurring revenues (close to the trough of 2008/9) to derive our bear case valuation of €56).

Bull Case €115

24x 2014x EV/FCF or 28.5x 2013e P/E, 24.4x 2014e P/E (MS basis

V6 product cycle becomes the standard. Our bull case assumes that the V6 product cycle is a major success and that DS software becomes a quasi standard. Top-line growth accelerates to 15% in 2011-14e while margins peak at 33.8% (vs. 23.1% in 09 but below the 40% previous peak). This drives 19% CAGR EPS 2011-14e.

Base Case €95

20x 2014e EV/FCF or a P/E of 25.3x 13e or 22.4x 14e

Delivering cross-selling of high growth areas in the base and new industries. We assume that DS returns to double-digit top-line revenue growth (12% CAGR 11e-14e), driven by higher growth areas such as social collaboration and search-based applications as well as solid growth in the core. We expect margins to peak at 32.6% in 2014e. This drives 14% CAGR EPS 2011-14.

Bear Case €56

3.5x Bear Case 14e EV/recurring revenues

Macro deteriorates sharply OR V6 risks materialise, CATIA saturated, new industries fail. Our bear case assumes either 1) a sharp deterioration in the macro environment or 2) that CATIA has few opportunities to grow, the installed base is reluctant to migrate to the other V6 products and DS fails to penetrate its new industries. We use 3.5x 2014e EV/recurring revenues (close to the 2008/9 trough) as we feel this represents a floor for a software company with a sticky installed base.

Why Overweight? • We believe highly recurring

software business models with growth deserve to trade at a clear premium to the sector / market

• We think DS is at the early stages of a major product cycle (V6 & 3D Experience) and expansion of its available market (new products and new industries). The group’s new distribution model should enable it to benefit from this better than ever before.

• DS has 65% recurring revenues and €1.2bn (2012e) of cash giving protection in a downturn – our bear case is an extreme trough scenario (in our view) as it is based on the trough EV/recurring multiple of 2009.

Risks to our price target • Operating leverage may be weaker

than we expect as DS invests for mid-term growth

• M&A may be technology driven which could dilute EPS in 13/14e

• Cross-selling and sales into new markets may be more difficult than we expect.

Upside drivers • CATIA Systems and the newer

products (Exalead, 3DVIA, 3DSWYM) could grow more strongly than expected.

• DS’s cash generation (>€400m FCF in 2012e) allows further M&A.

• Yen strength positive for sales & margins

Catalysts • Q4 results giving more colour

around FY13e (February 7th)

35



Dassault Systemes Models

Exhibit 52

Dassault Systemes Profit and Loss Account Y/E Dec 31 FY FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012e - Up-front licences 407.6 289.7 393.9 465.0 547.0 611.6 684.6 120.3 127.9 119.5 179.3 - Recurring (maintenance & subscription) 750.2 811.5 1,033.3 1,152.4 1,311.9 1,440.5 1,590.3 299.6 329.9 340.7 341.7Total software sales 1,157.8 1,101.3 1,427.2 1,617.4 1,858.9 2,052.1 2,275.0 419.9 457.8 460.2 521.0Services/Other Revenues 180.4 151.5 152.8 166.1 183.9 194.2 211.7 42.5 45.1 44.8 51.5Total Revenues 1,338.2 1,252.8 1,580.0 1,783.5 2,042.8 2,246.3 2,486.7 462.4 502.9 505.0 572.5

Gross ProfitLicences Gross Profit 1,101.0 1,044.7 1,351.0 1,536.7 1,765.6 1,949.1 2,160.8 397.5 435.8 438.6 493.7Services Gross Profit 25.9 12.7 8.7 (2.0) 13.3 14.3 19.8 (0.4) 2.3 3.7 7.7Group Gross Profit 1,126.9 1,057.4 1,359.7 1,534.7 1,778.9 1,963.4 2,180.6 397.1 438.1 442.3 501.4

Research & Development (297.7) (288.4) (310.1) (319.2) (358.9) (391.6) (428.5) (83.8) (90.5) (89.9) (94.7)Sales & Marketing (383.1) (351.9) (475.8) (529.8) (616.6) (673.2) (739.4) (143.2) (164.6) (146.5) (162.3)General & Administrative (104.1) (103.3) (122.1) (143.1) (157.3) (165.5) (177.0) (34.8) (36.0) (41.3) (45.2)Total Expenses (784.9) (743.6) (908.0) (992.1) (1,132.9) (1,230.3) (1,344.8) (261.8) (291.1) (277.7) (302.3)

DS non IFRS EBIT 342.0 313.8 451.7 542.6 646.1 733.1 835.7 135.3 147.0 164.6 199.2Stock based compensation (22.0) (24.5) (20.9) (20.7) (34.5) (24.2) (25.4) (5.5) (5.0) (18.0) (6.0)MS EBIT 320.0 289.3 430.8 521.9 611.6 709.0 810.4 129.8 142.0 146.6 193.2Amortisation / other exceptionals (46.1) (58.2) (108.8) (94.0) (99.8) (107.1) (101.6) (23.7) (15.5) (35.2) (25.4)Stated EBIT 273.9 231.1 322.0 427.9 511.8 601.9 708.8 106.1 126.5 111.4 167.8

Net Interest 8.9 (4.1) (2.0) 1.1 16.1 18.0 21.9 4.3 1.0 6.8 4.0

DS non IFRS PBT 350.9 309.7 449.7 541.3 654.5 751.1 857.7 137.0 148.0 166.3 203.2MS PBT 328.9 285.2 428.8 520.6 620.0 727.0 832.3 131.5 143.0 148.3 197.2Stated PBT 282.8 227.0 320.0 429.0 527.9 619.9 730.7 110.4 127.5 118.2 171.8

DS non IFRS Tax (109.8) (88.3) (147.0) (177.6) (223.1) (256.0) (292.3) (47.0) (51.5) (54.5) (70.1)MS Tax (102.9) (81.2) (140.3) (170.9) (211.5) (247.8) (283.7) (45.1) (49.8) (48.6) (68.0)Tax (81.9) (56.9) (99.4) (138.5) (174.0) (203.9) (240.1) (37.2) (42.0) (35.5) (59.3)

Minority interest (0.4) (0.3) (0.1) (1.3) (2.2) 0.0 0.0 (1.1) (1.0) (0.1) 0.0

DS non IFRS Net Income 240.7 221.1 302.6 362.4 429.2 495.1 565.3 88.9 95.5 111.7 133.1MS Net Income 225.6 203.7 288.4 348.4 406.3 479.2 548.6 85.3 92.2 99.6 129.2Net Income 200.5 169.8 220.5 289.2 351.7 416.0 490.6 72.1 84.5 82.6 112.5

DS non IFRS fully diluted EPS 2.02 1.87 2.50 2.92 3.41 3.87 4.36 0.71 0.76 0.89 1.05MW EPS 1.89 1.72 2.38 2.81 3.23 3.75 4.23 0.68 0.73 0.79 1.02Fully Diluted Stated EPS 1.68 1.43 1.82 2.33 2.79 3.25 3.78 0.58 0.67 0.66 0.89

Shares in Issue 117.3 117.6 119.1 121.4 123.2 123.9 124.9 122.8 123.4 123.4 123.4Fully Diluted Shares In Issue 119.3 118.5 121.2 124.0 125.9 127.8 129.7 125.3 125.9 126.0 126.4

% change - Organic up-front software (4.9) (31.4) 21.2 14.8 11.7 10.4 11.9 17.5 9.6 9.1 9.9 - Organic recurring (maintenance & subscription) 17.1 4.0 8.0 7.2 8.4 8.7 10.4 6.3 12.3 8.3 8.0Organic total software sales 8.3 (8.5) 11.5 9.3 9.4 9.2 10.9 9.3 11.5 8.5 8.6Organic revenues 6.0 (9.8) 9.7 9.3 8.7 8.5 10.7 9.4 11.0 8.1 7.2Stated licences 7.2 (4.9) 29.6 13.3 14.9 10.4 10.9 12.7 17.9 16.7 12.7Stated revenues 4.9 (6.4) 26.1 12.9 14.5 10.0 10.7 12.8 17.3 16.7 11.8DS non IFRS EBIT 2.2 (8.3) 44.0 20.1 19.1 13.5 14.0 16.5 22.3 18.9 18.6MS EBIT 1.1 (9.6) 48.9 21.1 17.2 15.9 14.3 15.6 22.2 11.5 19.3DS non IFRS fully diluted EPS 1.8 (7.6) 33.8 17.1 16.6 13.6 12.6 11.8 18.2 14.6 20.6MW EPS 0.6 (9.2) 38.5 18.1 14.8 16.2 12.9 10.9 18.1 7.6 21.4

% margin and tax rateGroup gross margin 84.2 84.4 86.1 86.0 87.1 87.4 87.7 85.9 87.1 87.6 87.6Research & Development (22.2) (23.0) (19.6) (17.9) (17.6) (17.4) (17.2) (18.1) (18.0) (17.8) (16.6)Sales and Marketing (28.6) (28.1) (30.1) (29.7) (30.2) (30.0) (29.7) (31.0) (32.7) (29.0) (28.3)General & Admin (7.8) (8.2) (7.7) (8.0) (7.7) (7.4) (7.1) (7.5) (7.2) (8.2) (7.9)DS non IFRS EBIT margin 25.6 25.0 28.6 30.4 31.6 32.6 33.6 29.3 29.2 32.6 34.8MS EBIT margin 23.9 23.1 27.3 29.3 29.9 31.6 32.6 28.1 28.2 29.0 33.7Underlying Tax Rate (31.3) (28.5) (32.7) (32.8) (34.1) (34.1) (34.1) (34.3) (34.8) (32.8) (34.5) e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

36



Exhibit 53

Dassault Systemes Balance Sheet Year end 31 December 2008 2009 2010 2011 2012e 2013e 2014eNet Working Capital (55.3) (41.9) (214.4) (275.5) (259.4) (242.6) (223.8)as % of sales (4.1) (3.3) (13.6) (15.4) (12.7) (10.8) (9.0)

Gross Tangible Fixed Assets 169.6 173.0 188.0 238.4 307.9 380.5 458.7Accumulated Depreciation (100.3) (113.5) (121.6) (131.8) (166.6) (204.8) (247.0)Tangible Fixed Assets 69.3 59.6 66.4 106.6 141.3 175.7 211.6

Gross Intangibles 1,138.1 1,045.7 1,708.7 1,804.5 2,077.8 2,077.8 2,077.8Accumulated Amortisation (416.1) (384.9) (475.4) (562.6) (662.4) (769.5) (871.1)Net Intangibles 722.0 660.8 1,233.3 1,241.9 1,415.4 1,308.3 1,206.7

Other Non Current Assets 4.3 0.0 0.0 0.0 0.0 0.0 0.0Long Term Deferred Tax Assets 38.3 51.0 72.8 83.0 83.0 83.0 83.0Short Term Investments 46.3 118.9 162.6 268.7 268.7 268.7 268.7Net Capital Employed 824.9 874.9 1,346.9 1,453.3 1,677.6 1,621.7 1,574.8Net Debt 594.1 739.1 656.4 853.0 896.4 1,270.5 1,694.6Capital Lease / Other (4.1) (2.0) (12.4) (4.9) (4.9) (4.9) (4.9)Employee Profit Sharing / Other non current provisio (59.8) (90.0) (107.5) (120.4) (120.4) (120.4) (120.4)Pension & Post Retirement Benefits (24.6) (26.1) (34.4) (37.9) (37.9) (37.9) (37.9)Deferred Taxes (26.1) (47.1) (57.2) (59.4) (59.4) (59.4) (59.4)Total Shareholders Equity 1,302.9 1,447.7 1,790.8 2,066.2 2,333.7 2,651.9 3,029.2Minority interest (1.6) (1.1) (1.0) (17.5) (17.5) (17.5) (17.5)


Exhibit 54

Dassault Systemes Cash Flow Statement Year end 31 December 2008 2009 2010 2011 2012e 2013e 2014eNet Income 200.5 170.0 220.5 290.5 351.7 416.0 490.6Depreciation 23.0 23.1 24.2 25.1 34.7 38.2 42.3Amortisation 43.5 46.3 75.9 87.3 99.8 107.1 101.6Total Depreciation & Amortisation 66.4 69.4 100.0 112.3 134.5 145.3 143.9Loss on Disposal (17.5) 0.0 0.0 0.0 0.0 0.0 0.0Deferred Income Taxes 7.2 (0.8) (3.1) 0.0 0.0 0.0 0.0Tax Benefits 27.5 1.5 0.7 0.0 0.0 0.0 0.0Profit Sharing 0.0 22.4 19.1 17.3 0.0 0.0 0.0Other 18.9 7.0 15.6 32.3 0.0 0.0 0.0Total adjustments 302.9 269.6 352.8 452.4 486.2 561.3 634.5Change in Net Working Capital 6.1 28.4 55.4 (1.5) (16.0) (16.8) (18.8)Net Cash From Operating Activities 309.0 297.9 408.2 450.9 470.2 544.4 615.7Sale of PPE 36.0 0.4 1.3 0.3 0.2 0.0 0.0Capex (53.6) (16.3) (37.3) (71.4) (69.5) (72.6) (78.2)Purchase - Investments (87.3) (204.8) (147.1) (103.8) 0.0 0.0 0.0Sale - Investments 70.5 124.5 105.2 0.0 0.0 0.0 0.0Acquisitions (29.1) 0.0 (462.5) (37.4) (293.3) 0.0 0.0Cash used in Investing Activities (62.8) (95.7) (541.4) (214.9) (342.6) (72.6) (78.2)Payments on Capital Leases 0.0 (0.2) 0.0 0.0 0.0 0.0 0.0Proceeds from Stock Options 57.5 15.5 97.4 233.4 74.2 3.2 5.0Cash Dividends Paid (53.7) (54.8) (54.5) (65.8) (86.5) (101.0) (118.4)Net Cash from Financing (75.1) (39.5) 35.7 (59.1) (84.2) (97.8) (113.4)FX impact 25.8 (17.8) 32.5 27.1 0.0 0.0 0.0Other (0.0) (0.1) (17.6) (7.4) 0.0 0.0 0.0Change in Net Debt 196.9 144.9 (82.7) 196.6 43.4 374.1 424.1

Free Cash Flow (OCF - Capex) 255.4 281.7 370.9 379.5 400.7 471.9 537.5 e = Morgan Stanley Research estimates; Source: Company Data, Morgan Stanley Research

37



Indra (IDR.MC, UW, PT €8)

Negative mix and Spanish exposure likely to weigh

WARNINGDONOTEDIT_RRS4RL~IDR.MC~

€8.00 (-23%)

€ 10.45

€5.00 (-52%)

€14.00 (+34%)

0

2

4

6

8

10

12

14

16

18


€

Price Target (Jan-14) Historical Stock Performance Current Stock Price

Price Target €8 2014e EPS on an 8x P/E to reflect lower FCF yield vs. sector peers.

Bull Case €14 (unch.)


Spain recovers and emerging markets continue to fuel growth. Indra expands in international markets (11% growth in 2013e & 7.5% 2014e), offsetting weak performance in Spain (-2% growth in 2013e & 2% growth 2014e). This means Indra grows c.5.3% l-f-l in 2014e. Margin expansion towards 10% is as expected with Indra reaching a 10% margin in 2014e. EPS is €1.36 in 2014e. We value our bull case at 11x 14e P/E. This is a lower bull case P/E than we use for other IT Services companies, reflecting the lower FCF yield. This gives a value of €14 per share.

Base Case €8 (unch.)


International grows but Spain still weak. Decent contract wins in international markets mean that revenue grows c.9%, offsetting a weaker Spain (-8%/0% in 13/14e) so that Indra grows 1% /3% l-f-l in 13/14e. But tough conditions price wise and declines in its high-margin Defence business in 2012e mean margins remain flat in 2013e, despite opex cuts at 8.6% recovering to 9.2% in 2014e (consensus basis). EPS is €1.01 in 2014e (adjusted for R&D capitalisation) and we value this at 8x. This is a lower base case P/E than we use for other IT Services companies, reflecting the lower FCF yield. This gives a value of €8 per share.

Bear Case €5 (unch.)

0.55x Bear Case 14e EV/sales

Spain weakens and International slows: Macro slowdown in Spain continues to hit growth and the domestic business declines by-9% in 2013e and by -2% in 2014e. This is offset by a still-growing international (7% in 2013e, 4% in 2014e), meaning overall revenuesare -0.1/+1.4% l-f-l in 2013/14e. Margins are 8.7% (consensus basis) vs. 9.5% in 2011. At 0.55x EV/sales; our bear case valuation is €5. The downside we see is a key element to our UW thesis.

Why Underweight?

• Indra is a high-quality company with a differentiated, well-managed business that offers a rare combination of premium growth and margin premium (differentiated repeatable solutions).

• But organic growth likely to remain subdued … as the recession and increased public deficits put additional pressure on defence (c.17% of total revenue) and other public sector and quasi public sector areas (further c.39% of revs).

• … and mix shift erodes margins. Defence has a high solution content and is more profitable as a result (we estimate c.25% of revs but maybe 30% plus of EBIT). As budgets here remain under pressure, the mix shift will put further pressure on group margins.

• Premium to peers no longer warranted: Rising working capital levels and strong R&D capitalisation on the P&L means the cash generation remains weak vs. peers in the sector (3% FCF yield vs peers at 6%). Moreover, EPS growth is likely to remain subdued due to Defense / Spain exposure (Spain 44% of sales 2012e).

Risks to Price Target:

• Working capital weakness troughs and cash generation improves as a result.

• International growth could offset Spain weakness. Indra is rapidly expanding in underpenetrated developed markets and now has c. 20% of revenues in fast growth Latam.

Source: Thomson One (historical share price data), Morgan Stanley Research estimates

38



Indra Models

Exhibit 55

Indra Profit and Loss Account Y/E Dec 31 FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2009 2010 2011 2012 2013e 2014e 2012 2012 2012 2012eRevenues 2,513.2 2,557.0 2,688.5 2,916.8 3,005.0 3,106.1 714.3 754.4 652.1 796.0Other Income 60.6 74.4 83.8 90.3 78.1 62.1 20.1 23.4 22.9 23.9

EBITDA 327.4 327.4 313.4 293.5 307.5 335.0 70.7 74.5 68.3 80.0Depreciation & Amortization -42.0 -42.1 -45.6 -46.9 -47.6 -49.2 (11.0) (11.2) (12.0) (12.7)EBIT for Consensus 285.4 285.3 267.8 246.6 259.9 285.8 59.7 63.2 56.4 67.3

Stock Option costs -1.5 -3.8 -1.1 -1.2 -1.3 -1.4 (0.8) 0.8 0.0 (1.2)EBIT pre restructuring & stock option costs 287.0 289.1 268.9 247.8 261.2 287.1 60.5 62.4 56.4 68.5

Goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Restructuring costs 0.0 -33.4 0.0 -27.7 -20.0 0.0 (9.9) (10.2) (7.1) (0.5)Stated EBIT 285.4 251.9 267.8 218.9 239.9 285.8 49.8 53.0 49.3 66.8

Net financial income -24.9 -19.1 -37.7 -53.6 -52.0 -51.0 (10.6) (15.6) (12.9) (14.5)Associates 0.2 0.9 3.2 1.9 2.0 2.0 0.1 (1.7) 2.5 1.0Other investments 0.0 0.0 0.0 0.0 0.0 0.0Other income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Exceptional items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Pro forma profit before tax 260.7 267.0 233.3 194.9 209.9 236.8 49.2 45.9 46.0 53.8Stated profit before tax 260.7 233.6 233.3 167.2 189.9 236.8 39.3 35.7 38.9 53.3Pro forma tax -62.7 -52.2 -52.2 -42.7 -47.2 -56.8 (10.7) (10.5) (10.0) (12.1)Stated tax -62.7 -45.7 -52.2 -35.8 -42.7 -56.8 (8.2) (7.4) (8.2) (12.0)Minorities -2.4 0.6 -0.1 2.1 1.0 1.0 0.9 1.1 1.2 (1.1)

Pro forma Net Income 195.6 215.4 181.0 154.2 163.7 180.9 39.4 36.6 37.2 40.6Stated Net Income 195.6 188.5 181.0 133.5 148.2 180.9 32.0 29.4 31.9 40.2

Average diluted shares in issue 161.1 162.8 163.0 162.2 162.2 162.2 163.2 160.7 162.2 162.2

MW EPS (Pro forma diluted EPS) 1.21 1.32 1.11 0.95 1.01 1.12 0.24 0.23 0.23 0.25Stated diluted EPS 1.21 1.16 1.11 0.82 0.91 1.12 0.20 0.18 0.20 0.25

Profit & Loss MetricsRevenue growth 5.6 1.7 5.1 8.5 3.0 3.4 8.6 8.4 13.2 4.9Organic revenue growth 5.5 -0.6 3.1 0.4 1.4 3.4 1.3 (2.2) 1.4 1.3EBITA pre restructruing & stock option costs margin 11.4 11.3 10.0 8.5 8.7 9.2 8.5 8.3 8.6 8.6EBITA pre restructuring margin 11.4 11.2 10.0 8.5 8.6 9.2 8.4 8.4 8.6 8.5Stated EBIT margin 11.4 9.9 10.0 7.5 8.0 9.2 7.0 7.0 7.6 8.4Pro forma diluted EPS growth 6.6 8.9 -16.1 -14.4 6.1 10.5 (20.4) (33.2) (5.7) 12.8


39



Exhibit 56

Indra Cash Flow Statement Y/E Dec 31 FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2009 2010 2011 2012 2013e 2014e 2012 2012 2012 2012eProfit before tax 260.7 233.6 233.3 167.2 189.9 236.8 39.3 35.7 38.9 53.3Depreciation 42.0 42.1 45.6 46.9 47.6 49.2 11.0 11.2 12.0 12.7Provisions/Other 8.2 12.9 8.9 -5.8 1.3 1.4 5.6 (2.0) (10.6) 1.2Other adjustments 27.0 19.4 36.3 51.8 51.2 50.2 10.6 17.8 9.3 14.1

Change in net working capital -66.4 -144.6 -152.3 -76.6 -40.7 -48.2 (78.8) 26.7 30.8 (55.3)

Income taxes paid -61.7 -54.4 -75.2 -41.1 -37.6 -56.8 (2.3) (23.0) (11.0) (4.8)Net interest -20.8 -12.6 -27.2 -42.6 -42.2 -48.5 (9.2) (9.6) (13.3) (10.5)

Cash flow from Operations (CFO) 188.9 96.3 69.4 99.9 169.4 184.2 (23.8) 56.9 56.1 10.7

Capex -28.8 -22.3 -42.1 -24.1 -28.6 -34.5 (10.9) (4.0) (5.4) (3.8)Other investments -71.7 -118.9 -129.4 -106.7 -56.0 -159.0 (5.4) (64.5) (30.9) (5.9)Disposals 0.6 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Cash used in Investing -99.9 -138.3 -171.5 -130.8 -84.6 -193.5 (16.3) (68.5) (36.3) (9.7)

Share issue/repurchase 12.9 -6.4 -3.6 -7.6 0.0 0.0 2.7 (23.3) 13.0 0.0Dividends -101.0 -106.8 -110.9 -109.3 -87.8 -82.4 0.0 0.0 (109.3) 0.0Other 16.0 17.9 -22.5 1.5 0.0 0.0 (0.1) 0.8 0.8 0.0Cash used in Financing -72.1 -95.4 -137.0 -115.4 -87.8 -82.4 2.6 (22.5) (95.5) 0.0

FX/Other -2.3 -2.9 0.2 0.0 0.0 0.0 1.8 -4 2.2 0

Change in net debt 14.6 -140.2 -238.9 -146.4 -2.9 -91.8 (35.7) (38.1) (73.5) 1.0

Cash Flow metricsDepreciation/Sales 1.7 1.6 1.7 1.6 1.6 1.6Capex/Sales 1.1 0.9 1.6 0.8 1.0 1.1Capex/Depreciation 68.6 52.9 92.3 51.4 60.0 70.0CFO/Sales 7.5 3.8 2.6 3.4 5.6 5.9CFO/EBITA 65.8 33.3 25.8 40.3 64.9 64.1Free Cash Flow (FCF)/Sales 4.3 0.2 -2.1 0.7 2.8 2.9FCF/EBITA 38.0 1.5 -21.1 8.0 32.5 30.9


40



Exhibit 57

Indra Balance Sheet Y/E Dec 31 FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2009 2010 2011 2012 2013e 2014e 2012 2012 2012 2012eTrade Debtors 815.7 901.9 953.3 1,034.2 1,065.5 1,101.4Current Assets 1,636.2 1,921.7 2,198.8 2,330.3 2,382.0 2,484.1Current Liabilities (1,217.0) (1,428.5) (1,548.8) (1,592.0) (1,603.0) (1,656.9)

Net Working Capital 419.2 493.2 649.9 738.3 779.0 827.2 720.0 571.3 683.0 738.3

Net Goodwill 440.2 456.3 624.6 650.5 650.5 748.5 616.6 652.2 650.5 650.5Net PP&E 140.4 148.2 171.9 154.9 135.8 121.1 165.6 165.5 163.8 154.9Net Intangibles 133.6 219.9 243.3 292.4 348.4 409.5 255.4 273.5 286.5 292.4Deferred tax assets 31.3 50.3 138.0 157.1 157.1 157.1 136.8 152.8 157.1 157.1Associates 5.8 7.1 9.0 0.0 0.0 0.0Other investments 35.6 43.4 57.4 67.4 68.2 69.0 65.0 63.2 67.0 67.4Deposits 0.0 0.0 0.0 0.0 0.0 0.0

Net Capital Employed 1,206.0 1,418.4 1,894.1 2,060.6 2,139.1 2,332.3 1,959.4 1,878.5 2,007.9 2,060.6

Net Cash/(Debt) (134.6) (274.9) (513.6) (660.0) (663.0) (754.8) (549.4) (587.5) (661.0) (660.0)Provisions (55.1) (70.5) (188.9) (169.5) (174.6) (174.6) (183.9) (155.3) (162.3) (169.5)Equity swap 0.0 0.0 (91.8) (12.7) (22.5) (25.0) (6.3) (9.4) (8.7) (12.7)Capital grants (34.4) (52.8) (32.6) (124.7) (124.7) (124.7) (108.7) (122.9) (124.7) (124.7)Other non current liabilities (4.8) (6.2) 0.0 0.0 0.0 0.0

Shareholder's Equity 931.8 991.0 1,045.8 1,069.3 1,131.0 1,230.9 1,090.1 979.4 1,028.0 1,069.3Minorities (45.3) (23.0) (21.4) (24.3) (23.3) (22.3) (20.9) (24.1) (23.2) (24.3)

Balance Sheet metricsDSOs 116.8 127.0 127.6 127.6 127.6 127.6Net Working Capital/Sales 16.7 19.3 24.2 25.3 25.9 26.6


41



Sage (SGE.L, EW, PT 320p)

Valuation reflects organic revs growth/SMB risk & cash return potential

WARNINGDONOTEDIT_RRS4RL~SGE.L~

320p (+6%)302p

240p (-21%)

380p (+26%)

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Price Target (Jan-14) Historical Stock Performance Current Stock Price

Price Target 320p We use a 12.5x Base Case CY2012e multiple which we think reflects its organic EPS growth profile and SMB customer risk in a tough macro environment.

Bull Case 380p (from 350p)

14x Bull FY14 EPS

No macro worsening, good organic revenue growth and margin expansion: No impact on SMB spending drives double-digit EPS growth (~14% in FY2014e). Sage re-rates closer to European Software average/its own historical average of 15-16x.

Base Case 320p (from 280p)

12.5x Base FY14 EPS

Slow macro but high proportion of recurring revenues helps: This leads to top-line growth of low single digits (~3% organic growth). Sage gradually re-rates, but remains below Software averages due to its SMB/Europe exposure in a tough macro environment. Buybacks boost EPS but full impact is felt in FY13. We estimate CY14 EPS of 25.3p, on which we use a target multiple of 12.5x for our Base Case which puts it on a FY13 PEG of 1.2x (FY13 PE / CY14/13 EPS growth); in-line with sector peers having similar organic growth. Our Base Case fair value is 320p.

Bear Case 240p (from 230p)

3x Bear FY14 EV/ Maintenance

Macro weakens and Sage SMB customers hit hard: We estimate revenues decline ~1% in FY13e on the back of a tough macro (recession). Margins decline to 25% by FY14e from 27% in FY12 as Sage continues to invest in product rollouts as planned. We value the Bear Case on a FY14e EV/Maintenance multiple of 3x (towards trough levels in 2008/09) for our Bear Case fair value of 240p.

Source: FactSet (historical share price data), Morgan Stanley Research estimates

Why Equal-weight?

• Valuation in-line with sector average: Reflects lower organic growth potential but accretion from cash returns. Sage’s ~13.2x FY13e P/E is below the European Software sector. While Sage’s organic revenue growth profile is lower relative to the sector and it carries a risk from slower SMB spending on the back of the macro, we think the multiple also reflects the potential for cash returns to shareholders.

• SMB environment can get tough: Given the broader macro slowdown, we see a slowing spending risk for Sage customers. Moreover with >50% of revenues coming from Europe, we think the lower GDP growth expectations for the region could weigh.

• Re-investments and R&D spend needs could limit margin expansion. We expect Sage to re-invest savings and spend on new product launches which could leave margins broadly flat yoy. Further out, we think Sage could need to invest in SaaS/products limiting margin upside potential in the M/T.

• Installed base and M&A could drive upside. Increased product/service cross-selling and uptake of premium support is an opportunity on which Sage has to deliver. M&A could be a catalyst.

Risk to our price target?

• No impact on SMB spending from macro

• Sage has been acquisitive in the past and M&A could impact our thesis

Potential Catalysts

• US SMB survey – Monthly

42



Sage Models

Exhibit 58

Sage Profit and Loss Account Year Ending September 2011 2012 2013E 2014E 2015E

(£ million) FY08 FY09 FY10 FY11 1H12 2H12 FY12 FY13e FY14e FY15e

Europe 763 760 796 400 376 776 782 814 842

US 501 576 550 391 199 213 412 472 491 511

Rest of World 91 100 126 148 74 79 153 162 175 189

Total Revenue 1,295 1,439 1,435 1,334 673 667 1,340 1,416 1,479 1,542

% change (reported) 12% 11% 0% -7% 0% 1% 0% 6% 4% 4%

% change (org, c/c) 3% -5% 0% 4% 1% 3% 2% 3% 4% 4%

Total Operating Expenses (1,028) (1,159) (1,105) (991) (501) (494) (995) (1,053) (1,094) (1,126)

Europe 192 212 229 113 106 221 233 244 238

Europe margin (%) 25% 28% 29% 28% 28% 29% 30% 30% 28%

US 88 105 122 100 49 57 106 124 131 138

US margin (%) 18% 18% 22% 26% 25% 27% 26% 26% 27% 27%

Rest of World 23 24 32 37 19 22 41 43 46 52

RoW margin (%) 26% 24% 25% 25% 26% 28% 27% 27% 27% 28%

EBITA 300 321 366 366 181 185 366 388 411 435

Group EBITA margin (%) 23% 22% 25% 27% 27% 28% 27% 27% 28% 28%

Amortisation of intangibles (32) (40) (35) (22) (9) (9) (17) (26) (26) (19)

Operating income 267 281 330 343 172 173 345 363 385 415

% revenues 21% 19% 23% 26% 26% 26% 26% 26% 26% 27%

Net Interest Receivable/Payable (26) (13) (10) (13) (5) (6) (11) (16) (19) (20)

Profit Before Tax - Reported 241 267 320 331 167 167 334 347 366 395

Profit Before Tax 273 308 356 353 176 180 356 372 392 414

Pretax Margin - Normalised (%) 21 21 25 26 26 27 27 26 26 27

Tax - Reported (75) (78) (93) (75) (49) (47) (95) (101) (106) (115)

Tax Rate (Effective) (%) 31 29 29 23 29 28 29 29 29 29

Profit After Tax - Reported 166 190 227 256 119 120 239 246 260 281

Profit After Tax 166 190 227 256 119 120 239 246 260 281

Profit After Tax Margin - Normalised (%) 13 13 16 19 18 18 18 17 18 18

Equity Minority Interest 0 0 0 0 0 0 0 0 0 0

Income from discontinued items 0 0 (67) na na 58 0 0 0

Net Income - Reported 166 190 227 189 176 120 297 246 260 281

Net Income - Normalised 188 218 253 274 125 129 254 264 278 294

Basic Weighted Average Shares (m) 1,307 1,311 1,315 1,317 1,309 1,254 1,282 1,190 1,128 1,087

Diluted Weighted Average Shares (m) 1,310 1,314 1,319 1,327 1,312 1,256 1,284 1,190 1,128 1,087

Basic EPS - Reported (p) 12.7 14.5 17.3 19.4 9.1 9.6 18.7 20.7 23.1 25.8

ModelWare EPS (p) 14.4 16.6 19.2 20.7 9.5 10.3 19.8 22.2 24.7 27.1

EPS Growth Y/Y - Normalised (%) 8.3 15.5 15.5 7.9 3.7 -10.4 -4.2 12.2 11.0 9.7

Adjusted EPS - Calendarised (p) 14.92 17.23 19.53 20.45 20.41 22.83 25.27 27.16

Basic DPS (p) 7.2 7.4 7.8 9.8 3.5 6.7 10.2 10.6 11.1 11.7

Growth Y/Y (%) 3.00 3.05 4.98 25.00 29.68 6.20- 4.10 3.97 5.26 5.75

* Normalised figures reflect adjustments for nonrecurring/discontinued items.

e = Morgan Stanley Research Estimates. NA = Not Available/Applicable

20102008 2009


43



Exhibit 59

Sage Balance Sheet

Y/E Sept 2009 2010 2011 2012 2013e 2014e 2015e

(£ million) FY09 FY10 FY11 FY12 FY13e FY14e FY15e

Intangible Assets 2,247 2,210 1,854 1,954 1,939 1,925 1,916

Tangible Assets 144 150 146 142 144 146 149

Deferred Tax Asset 8 10 21 10 10 10 10

Total Fixed Assets 2,399 2,370 2,022 2,106 2,093 2,081 2,075

Stocks 5 4 3 3 3 3 3

Debtors 275 276 285 303 333 347 362

Cash at Bank and in Hand 59 71 183 62 115 155 280

Total Current Assets 340 351 471 367 450 505 644

Total Assets 2,738 2,721 2,743 2,473 2,543 2,586 2,720

Creditors < 1 Year (315) (363) (309) (289) (317) (330) (339)

Net Current Assets 25 (11) 162 78 132 176 305

Total Assets - Current Liabs 2,424 2,359 2,435 2,185 2,226 2,257 2,380

Creditors > 1 Year (479) (252) (194) (209) (359) (409) (509)

Deferred Income (372) (365) (391) (406) (425) (444) (462)

Net Assets 1,497 1,649 1,708 1,375 1,248 1,210 1,215

Called-up Equity Share Capital 13 13 13 13 13 13 13

Share Premium Account 632 650 671 492 244 71 (77)

Merger Reserve 109 109 109 109 109 109 109

Profit and Loss Account 743 877 915 761 881 1,016 1,169

Equity Shareholders' Funds 1,498 1,649 1,708 1,375 1,248 1,210 1,215

Cash/(Net Debt) -439 -220 -25 -162 -258 -268 -243

Net Debt/ EBITDA -2.3x -0.6x -0.1x -0.4x -0.6x -0.6x -0.5x e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

44



Exhibit 60

Sage Cash Flow Statement Y/E Sep. 2009 2010 2011 2012 2013 2014 2015

(£ million) 1H09 2H09 FY09 1H10 2H10 FY10 1H11 2H11 FY11 FY12 FY13e FY14e FY15e

Operating profit 148 132 281 164 166 330 169 174 343 345 363 385 415

Amortisation 0 46 46 18 18 35 20 2 22 26 26 26 19

Depreciation 11 13 24 11 16 27 12 17 28 22 24 26 28

Working capital/ Other 28 (22) 7 44 (7) 37 33 (162) 27 (11) 17 16 14

Cash Flow From Ops 187 169 358 237 192 429 234 30 421 382 430 453 476

Interest/Debt Servicing (9) (4) (12) (4) (5) (8) (6) (5) (11) (9) (16) (19) (20)

Corporation Tax Paid (18) (38) (56) (29) (47) (76) (41) (51) (93) (95) (101) (106) (115)

Net Interest and Tax Paid (26) (42) (68) (32) (52) (84) (47) (56) (104) (104) (117) (125) (135)

Capital Expenditure (10) (9) (30) (11) (18) (27) (15) (15) (30) (30) (36) (39) (42)

Acquisitions and Disposals (5) 3 (2) 4 (4) (0) 0 1 1 36 0 (0) 0

FCF Pre-M&A 151 118 260 194 123 317 171 (41) 287 248 277 289 300

Equity Dividends Paid (63) (33) (95) (65) (34) (99) (69) (35) (104) (137) (126) (125) (128)

Cash Flow Before Financing 57 46 95 101 34 135 55 (132) 80 44 34 38 38

Financing (100) (90) (190) (109) (93) (202) (58) (12) (70) (272) (98) (123) (48)

Increase/(Decrease) in Cash (3) (15) (18) 27 (9) 18 45 67 111 (128) 53 41 124 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

45



SAP (SAPG.DE, Overweight, PT €69, up from €61)

Accelerating Data spend drives risk-reward weighted to the upside

WARNINGDONOTEDIT_RRS4RL~SAPG.DE~

€69.00 (+11%)€ 62.08

€48.00 (-23%)

€86.00 (+39%)

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Price Target €69 Based on our Base Case fair value.

Bull Case €86 (up from €75)


Macro fears overdone, HANA, Sybase and other new segments see strong ramp. ERP resilient. Accelerating Big Data spend drives 17% CAGR in new licences in 2012-15e. This drives 15% revenue CAGR in 2012-15e, and with margins expanding to 35.7% (2015e) from 33.5% (2013e), we forecast a 22% EPS CAGR 12-15e. We use a P/E of 20x to reflect the strong licence and EPS growth (the upper end of the European Software sector) as we see investors paying for the faster growth SAP now offers.



Global GDP growth slows; software remains resilient. We expect new licence growth to moderate as global GDP growth slows, and so we see SAP returning to 10% licence CAGR in 2012-15e. Within this, new segments ramp nicely, offsetting slower ERP demand. SAP margins expand to 35% in 2015e (from 33.2% in 2013e). This drives a 11% revenue CAGR and 17% EPS CAGR for 2012-15e. We use a growth company P/E multiple of 17x 2014e to get to our PT of €69 (one standard deviation above the 2008 to date P/E average).

Bear Case €48 (up from €40)

5x Bear Case EV/Maint 2014e

Recession / deep value scenario – ERP declines, new products weak due to macro. SAP’s core extended ERP market declines and so licences decline 5% in 2013e and 10% in 2014e. Maintenance provides a floor, however, both in financial and valuation terms. We use a trough 5.1x EV/Maintenance to calculate our Bear Case FV, in-line with the 2008/9 trough valuation.

Source: Thomson One (historical share price data), Morgan Stanley Research estimates

Why Overweight? • Risk-reward weighted to the upside:

We see more upside than downside to the stock – and our bear case is based on trough multiples from the 2008/9 crisis.

• SAP has got its mojo back: Under co-CEOs Jim Snabe and Bill McDermott, and with the influence of co-founder Hasso Plattner, SAP has rediscovered innovation. The products SAP has developed / acquired target the hottest areas in Tech currently – Big Data, Mobile and Cloud. We see significant growth opportunities in each area.

• Big Data is an accelerating driver for SAP: Our Big Data blue paper suggests data technology spend will grow 25% Y/Y for companies with a Big Data strategy. We believe SAP is a key beneficiary of this, given its product set (HANA, Sybase) and lack of legacy cannibalization concerns.

• Maintenance offers a floor: >50% of revenues are recurring and growing at c. 10%. This provides a valuation floor and can protect the business if licence growth slows.

• HANA provides material optionality: Our HANA base case is based on near-term opportunities. The ‘blue sky’ long-term opportunity is significantly larger and adds optionality.

Risks to our price target • Macro turns, putting IT budgets under

pressure. • Slower take-up for HANA. Integration

of SFSF/ARBA fail. • Increasing opex limits margin.

Potential Catalysts • SAP Q412 results

46



SAP AG Models

Exhibit 61

SAP Profit and Loss Account €m FY FY FY FY FY FY FY Q1 Q2 Q3 Q4Y/E Dec 31 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012e -Licences 3,606 2,606 3,410 4,107 4,707 5,203 5,723 637 1,059 1,026 1,985 -Cloud Subscription 258 306 14 18 358 847 1,186 35 69 80 174 -Maintenance 4,759 5,296 6,444 7,221 8,195 8,988 9,895 1,954 2,014 2,106 2,121SSRS 8,623 8,208 9,868 11,346 13,261 15,038 16,805 2,626 3,142 3,212 4,281Total Services 3,110 2,474 2,669 2,914 3,126 3,350 3,513 731 774 758 863Total Revenues (SAP non IFRS) 11,733 10,682 12,537 14,260 16,387 18,388 20,317 3,357 3,916 3,970 5,144y/y growth 15% -9% 17% 14% 15% 12% 10% 10% 18% 16% 14%MS estimated organic revenue growth 7% -10% 9% 11% 8% 10% 10% 7% 11% 8% 7%

Gross profit - SSRS (SAP non IFRS) 7,176 6,747 8,241 9,521 11,151 12,650 14,121 2,159 2,651 2,680 3,661as a % of SSRS 83.2% 82.2% 83.5% 83.9% 84.1% 84.1% 84.0% 82.2% 84.4% 83.4% 85.5%Gross profit - Services (SAP non IFRS) 825 622 617 714 730 821 896 137 164 182 247as a % of Services 26.5% 25.1% 23.1% 24.5% 23.3% 24.5% 25.5% 18.8% 21.2% 24.0% 28.6%Gross profit (SAP non IFRS) 8,001 7,368 8,858 10,235 11,881 13,471 15,017 2,296 2,815 2,862 3,908as a % of sales 68.2% 69.0% 70.7% 71.8% 72.5% 73.3% 73.9% 68.4% 71.9% 72.1% 76.0%

R&D (SAP non IFRS) (1,596) (1,588) (1,701) (1,897) (2,135) (2,336) (2,560) (500) (523) (518) (594)as a % of sales 13.6% 14.9% 13.6% 13.3% 13.0% 12.7% 12.6% 14.9% 13.4% 13.0% 11.6%S&M (SAP non IFRS) (2,440) (2,107) (2,549) (2,953) (3,687) (4,179) (4,551) (776) (916) (917) (1,078)as a % of sales 20.8% 19.7% 20.3% 20.7% 22.5% 22.7% 22.4% 23.1% 23.4% 23.1% 21.0%G&A (SAP non IFRS) (609) (542) (612) (688) (798) (873) (964) (185) (206) (188) (219)as a % of sales 5.2% 5.1% 4.9% 4.8% 4.9% 4.7% 4.7% 5.5% 5.3% 4.7% 4.3%Other operating income / expense (SAP non IFRS) 12 32 9 15 15 15 15 (1) 3 0 13Total operating expenses (SAP non IFRS) (4,633) (4,205) (4,852) (5,523) (6,606) (7,372) (8,060) (1,462) (1,642) (1,623) (1,879)Total expenses (8,365) (7,518) (8,531) (9,548) (11,112) (12,289) (13,361) (2,523) (2,743) (2,731) (3,115)

Stock based compensation (SBC) (63) (53) (58) (68) (463) (300) (300) (83) (98) (152) (130)

SAP non IFRS EBIT (pre charges & SBC) 3,368 3,164 4,006 4,712 5,275 6,099 6,957 834 1,173 1,239 2,029as a % of sales 28.7% 29.6% 32.0% 33.0% 32.2% 33.2% 34.2% 24.8% 30.0% 31.2% 39.4%MS EBIT (pre charges, post SBC) 3,305 3,111 3,948 4,644 4,812 5,799 6,657 751 1,075 1,087 1,899as a % of sales 28.2% 29.1% 31.5% 32.6% 29.4% 31.5% 32.8% 22.4% 27.4% 27.4% 36.9%

Restructuring 0 (196) (2) 0 0 0 0 0 0 0 0Deferred revenue write-down (166) (11) (71) (28) (91) (193) (193) (7) (18) (18) (48)Acquisition related charges / Discontinued ops (297) (264) (304) (453) (583) (784) (784) (120) (134) (141) (196)Stated Operating profit 2,842 2,640 3,571 4,162 4,138 4,822 5,680 624 923 928 1,655

Other non-op income / expense (SAP non IFRS) (25) (81) (189) (80) (155) (60) (40) (8) (45) (92) (10)Financial income / expense (63) (71) (56) (45) (52) (148) (85) (15) (11) (7) (19)

SAP non IFRS PBT (pre charges & SBC) 3,280 3,011 3,761 4,587 5,068 5,891 6,832 811 1,117 1,140 2,000MS PBT (pre charges, post SBC) 3,217 2,763 3,694 4,519 4,605 5,591 6,532 728 1,019 988 1,870Profit before tax (stated) 2,754 2,488 3,330 4,037 3,923 4,614 5,555 601 867 829 1,626

SAP non IFRS tax (pre charges & SBC) (970) (798) (1,024) (1,215) (1,368) (1,620) (1,879) (228) (286) (304) (550)Tax rate (SAP non IFRS) 30% 26% 27% 26% 27% 28% 28% 28% 26% 27% 28%MS tax (pre charges, post SBC) (950) (786) (1,007) (1,193) (1,243) (1,538) (1,796) (205) (261) (263) (514)Tax (stated) (828) (663) (901) (1,041) (1,043) (1,315) (1,583) (161) (204) (206) (472)

Minority interest (1) (1) 0 0 0 0 0 0 0 0 0Exceptional gain / loss 0 0 (617) 444 (2) 0 4 (1) (5) 0

SAP non IFRS Net Income (pre charges & SBC) 2,309 2,212 2,738 3,372 3,700 4,271 4,953 583 831 836 1,450MS Net Income (pre charges, post SBC) 2,266 2,172 2,695 3,325 3,362 4,053 4,736 523 758 725 1,356Net income (stated) 1,925 1,824 1,812 3,440 2,879 3,299 3,972 444 662 618 1,154

Weighted avg number of shares in issue - diluted 1,191 1,189 1,189 1,190 1,193 1,194 1,196 1,191 1,192 1,193 1,193SAP non IFRS EPS (pre charges & SBC) 1.94 1.86 2.30 2.83 3.10 3.58 4.14 0.49 0.70 0.70 1.22% change yoy 15% -4% 24% 23% 9% 15% 16% 10% 18% -3% 13%MS EPS (pre charges, post SBC) 1.90 1.83 2.27 2.80 2.82 3.39 3.96 0.44 0.64 0.61 1.14% change yoy 17% -4% 24% 23% 1% 20% 17% 6% 11% -17% 6%EPS fully diluted (stated ) 1.62 1.53 1.52 2.89 2.41 2.76 3.32 0.37 0.56 0.52 0.97 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

47



Exhibit 62

SAP AG Balance Sheet €m FY FY FY FY FY FY FY Q1 Q2 Q3 Q4Y/E Dec 31 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012e

Net Working Capital 442 -385 -1,540 -1,048 -1,198 -1,311 -1,509 -2,575 -2,229 -2,046 -1,198as a % of sales -4% 4% 12% 7% 7% 7% 7% 77% 57% 52% 23%

PPE 1,405 1,371 1,449 1,551 1,665 1,803 1,956 1,576 1,656 1,632 1,665Goodwill 4,975 4,994 8,431 8,709 14,515 14,515 14,515 10,765 11,163 11,015 14,515Intangibles 1,140 894 2,376 2,024 2,437 2,074 1,715 2,679 2,689 2,527 2,437Other financial assets 262 284 475 538 596 596 596 649 651 596 596Trade / Other receivables 41 52 78 84 88 88 88 88 86 88 88Other non financial assets 32 35 31 39 53 53 53 51 50 53 53Tax assets / Other 33 91 122 146 165 165 165 152 157 165 165Deferred tax assets 441 398 736 465 600 600 600 480 500 600 600

Net Capital Employed 8,771 7,734 12,158 12,508 18,921 18,583 18,178 13,865 14,723 14,630 18,921

Cash 1,280 1,884 3,518 4,965 3,332 4,473 7,928 4,548 3,376 3,926 3,332Short-term investments 588 486 158 817 181 181 181 753 374 181 181Short-term debt -2,563 -146 -142 -1,331 -1,808 -1,808 -1,808 -1,675 -1,450 -1,808 -1,808Long-term debt -40 -729 -4,449 -2,925 -4,519 -2,719 -2,719 -2,893 -2,754 -2,119 -4,519Net Cash / (Debt) -735 1,495 -915 1,526 -2,814 127 3,582 733 -454 180 -2,814

Trade / other payables -42 -35 -30 -43 -52 -52 -52 -40 -39 -52 -52Tax liabilities -278 -239 -371 -408 -425 -425 -425 -432 -424 -425 -425Other non financial liabilities -13 -12 -85 -92 -102 -102 -102 -99 -98 -102 -102Provisions -232 -198 -292 -266 -312 -312 -312 -369 -311 -312 -312Deferred tax liabilities -239 -190 -578 -474 -561 -561 -561 -573 -565 -561 -561Deferred income -61 -64 -63 -44 -49 -49 -49 -38 -49 -49 -49

Issued Capital 1,226 1,226 1,227 1,228 1,228 1,229 1,234 1,228 1,228 1,228 1,228Treasury Shares -1,362 -1,320 -1,382 -1,377 -1,340 -1,340 -1,590 -1,384 -1,347 -1,340 -1,340Share premium 320 317 337 419 484 501 663 437 456 471 484Retained Earnings 7,422 8,571 9,767 12,466 14,034 16,470 19,452 12,912 12,260 12,880 14,034Other equity -437 -317 -142 -37 191 341 491 -155 177 61 191Shareholder's Equity 7,169 8,477 9,807 12,699 14,598 17,200 20,250 13,038 12,774 13,300 14,598Minority interests -2 -14 -17 -8 -9 -9 -9 -9 -9 -9 -9


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Exhibit 63

SAP AG Cash Flow Statement €m FY FY FY FY FY FY FY Q1 Q2 Q3 Q4Y/E Dec 31 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012eProfit after tax (stated) 1,848 1,824 1,812 3,440 2,879 3,299 3,972 444 662 618 1,154Total Depreciation & Amortisation 539 496 534 724 822 814 857 192 210 220 200Gains / Losses on non current asset disposal 11 -11 -3 0 0 0 0 0 0 0 0Gains / Losses on financial assets -16 -2 58 0 0 0 0 0 0 0 0Impairment loss on financial assets recognised in profit 15 11 0 0 0 0 0 0 0 0 0Decrease / Increase in sales + bad debt on receivables 76 66 -49 -18 18 0 0 28 -2 -8 0Stock based compensation related 0 14 25 14 158 150 150 -30 54 4 130Other adjustments for non cash items 52 0 -102 -9 -35 0 0 14 -37 -12 0Deferred income taxes -91 -74 -165 421 -245 0 0 -113 -121 -11 0Change in Net Working Capital -276 711 843 -744 106 113 198 1,536 -431 -151 -848Net cash flow from operations 2,158 3,035 2,953 3,776 3,695 4,376 5,177 2,071 331 656 637

Business combinations, net of cash acquired -3,773 -74 -4,194 -188 -6,257 0 0 -2,728 -29 0 -3,500Repayment of acquiree's debt -450 0 0 0 0 0 0 0 0 0 0 - Purchase of PPE (Capex) -290 -206 -309 -372 -485 -552 -610 -87 -161 -103 -134 - Purchase of intangible assets -49 -19 -25 -73 -45 -37 -41 -7 -20 -8 -10Total purchase of PPE / Intangibles -339 -225 -334 -445 -514 -588 -650 -94 -181 -95 -144Total proceeds from sale of PPE / Intangibles 44 45 43 55 30 0 0 13 9 8 0Cash from investing activities -4,518 -254 -4,485 -606 -6,741 -588 -650 -2,809 -201 -87 -3,644

Dividends paid -594 -594 -594 -713 -1,310 -864 -990 0 -1,310 0 0Purchase of treasury shares -487 0 -220 -246 -53 0 -250 -53 0 0 0Proceeds from reissuing treasury shares 85 24 127 251 83 0 0 48 21 14 0Proceeds from issuing shares (SBC linked) 20 6 23 46 28 18 167 10 4 1 13Derivatives - purchase -55 0 -14 0 0 0 0 0 0 0 0Derivatives - proceeds 24 4 4 0 0 0 0 0 0 0 0Cash from financing activities -1,007 -560 -674 -662 -1,252 -846 -1,072 5 -1,285 15 13

FX impact -1 52 162 74 -33 0 0 -130 69 28 0Discontinued operations 0 -17 0 0 0 0 0 0 0 0 0Other 0 -26 -367 -141 -9 0 0 70 -101 22 0Change in net debt -3,368 2,230 -2,411 2,441 -4,340 2,941 3,455 -793 -1,187 634 -2,994

Purchase of equity / debt instruments -396 -1,073 -841 -2,045 -905 0 0 -478 -80 -347 0Proceeds from sale of equity / debt instruments 595 1,028 1,334 1,398 1,517 0 0 430 511 576 0Cash transferred to restricted cash -448 0 0 0 0 0 0 0 0 0 0Use of restricted cash 1,001 3 0 0 0 0 0 0 0 0 0Proceeds from private placement 0 697 0 0 0 0 0 0 0 0 0Proceeds from borrowings 3,859 0 5,380 519 1,000 0 0 1,000 2 -2 0Repayments of borrowings -1,571 -2,303 -2,196 -1,005 1,087 -1,800 0 -600 -423 -290 2,400

Net change in cash / cash equivalents -328 608 1,633 1,449 -1,633 1,141 3,455 -417 -1,172 550 -594Cash / equivalents at start of period 1,608 1,280 1,884 3,518 4,965 3,332 4,473 4,965 4,548 3,376 3,926Cash / equivalents at end of period 1,280 1,888 3,517 4,967 3,332 4,473 7,928 4,548 3,376 3,926 3,332FCF 1,819 2,810 2,619 3,331 3,166 3,787 4,527 1,977 151 545 493 - % chg y/y 0% 55% -7% 27% -5% 20% 20% 36% -74% -11% -29% e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

49



Software AG (SOWG.DE, UW, PT €32, up from €24)

Lower growth justifies lower rating; BPE should offset contracting ETS

WARNINGDONOTEDIT_RRS4RL~SOWG.DE~

€32.00 (+2%)€ 31.41

€24.00 (-24%)

€45.00 (+43%)

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Price Target €32 Based on Base Case valuation.

Bull Case €45 (from €37)


Middleware growth drives revenue growth. We assume that ETS licences return to growth in 2014e albeit at a lower level of +3%. The BPE business (middleware) grows 15% giving overall licence growth of 11% in 2014e. Group revenues grow mid-single digits, reversing the negative trend we have seen recently. We see operating margins at 30% in 14e (vs. 27.5% in 11). This gives low double digit EPS growth in 2013/4e. We place this on 14x P/E, one standard deviationabove the mean since 2008.



ETS declines and limits group growth. In our base case we assume that ETS licences decline -2% organically in 14e. BPE achieves 10% organic growth and so we forecast overall licences growing 6% in 2014e. We assume margins of 28.3% in 2014e. This gives mid to high single digit (6-9%) EPS growth in 2013/4e. We value the base case using a 2014e multiple of 12x, in-line with the average multiple over the last 5 years.

Bear Case €24 (from €19)

4x Bear Case 14e Maintenance revenues

ETS declines accelerate, Middleware/BPE impacted by a tough macro environment. We value the Bear Case using a 4x 2014e EV/Maintenance multiple, near the trough levels reached in 2009.

Source: ThomsonReuters (historical share price data), Morgan Stanley Research estimates

Why Underweight? • Mainframe is in decline, and we

assume a structural decline scenario for the ETS business.

• While Middleware/BPE is growing, we expect the licence growth here to be closer to 10% per annum than 15% and so expect the weakness in ETL to continue to weigh on overall group licence growth rates (we forecast 6-7% p.a.)

• We see the slower organic license growth outlook warranting a lower rating and hence apply a 12x multiple to our 2014e EPS to get our price target of €32.

Risks to our price target • Terracotta could drive BPE growth

higher than expected.

• BPE (middleware) could grow faster than we forecast in the mid-term despite the macro environment and intense competition (IBM/ORCL/TIBX).

• Software AG’s strategy has been acquisition driven and a synergistic deal could be well received.

• Software AG has a strong track record of cost control and could do this again to support / improve margins (although we see less scope given the already slim cost base after the efficiencies of the last few years).

Downside drivers • ETS licences could decline faster

than we expect. 5-6% attrition would start to weigh on maint. revs.

• S&M investments to drive the topline could squeeze margins.

• 21% and 22% exposure to the public and financial sectors respectively could weigh.

Potential Catalysts • 4Q SOWG results, 29 Jan 2013

50



Software AG Models

Exhibit 64

Software AG Profit and Loss Account Y/E Dec 31 FY FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012e -ETS/Other licences 156.8 143.5 163.0 126.6 129.2 126.8 124.6 29.6 30.4 30.5 38.7 -webMethods licences 115.3 126.3 164.4 168.6 202.0 226.2 248.9 35.7 45.6 50.0 70.7Licence revenues 272.0 269.9 327.4 295.2 331.2 353.1 373.4 65.2 76.0 80.5 109.4Maintenance revenues 269.2 315.2 370.5 378.7 391.3 402.7 419.1 96.3 99.5 97.8 97.8Service revenues 177.8 262.5 418.7 419.8 336.4 340.7 356.1 92.7 82.7 78.2 82.7Other revenue 3.8 4.5 4.1 4.6 2.9 0.8 0.7 0.3 0.4 0.9 1.3Pro forma revenues 722.7 852.0 1,120.6 1,098.3 1,061.8 1,097.3 1,149.3 254.6 258.6 257.4 291.2Deferred write-down -2.1 -4.6 -1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Stated revenues 720.6 847.4 1,119.5 1,098.3 1,061.8 1,097.3 1,149.3 254.6 258.6 257.4 291.2Gross profit 524.5 570.5 699.5 676.6 700.0 732.7 765.7 158.7 167.0 173.4 201.0as a % of sales 72.8 67.3 62.5 61.6 65.9 66.8 66.6 62.3 64.6 67.3 69.0R&D -76.2 -82.2 -92.0 -88.0 -100.4 -105.6 -108.9 -24.2 -25.3 -25.2 -25.6Sales & Marketing -169.5 -183.5 -226.9 -217.8 -233.4 -248.4 -257.8 -55.9 -58.1 -56.8 -62.6G&A -65.1 -70.7 -85.3 -75.1 -76.1 -76.5 -77.3 -15.5 -18.7 -20.0 -21.8Other income/expense -16.5 16.3 27.3 6.4 3.2 4.0 4.0 1.0 1.7 -0.5 1.0MS EBITA 197.1 250.5 322.7 302.1 293.3 306.2 325.8 64.0 66.6 70.8 91.9as a % of sales 27.3 29.4 28.8 27.5 27.6 27.9 28.3 25.1 25.7 27.5 31.6Restructuring/Exceptionals 0.0 0.0 -20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Operating EBITA 197.1 250.5 302.7 302.1 293.3 306.2 325.8 64.0 66.6 70.8 91.9as a % of sales 27.3 29.4 27.0 27.5 27.6 27.9 28.3 25.1 25.7 27.5 31.6Amortisation -14.5 -27.8 -32.9 -32.9 -38.1 -35.5 -35.5 -9.2 -9.5 -9.7 -9.7Stated EBIT (post deferred write-down) 180.5 218.2 268.6 269.2 255.2 270.7 290.3 54.8 57.1 61.1 82.2as a % of sales 25.1 25.7 24.0 24.5 24.0 24.7 25.3 21.5 22.1 23.7 28.2Net interest -5.1 -8.9 -14.2 -9.9 -6.4 -2.2 6.0 -2.1 -1.9 -1.4 -1.1MS profit before tax 192.0 241.6 308.4 292.2 286.9 304.0 331.8 61.9 64.7 69.4 90.8Stated profit before tax 175.4 209.3 254.4 259.3 248.8 268.5 296.3 52.8 55.2 59.7 81.1MS (underlying) tax -65.2 -79.1 -95.5 -92.5 -91.7 -97.2 -106.1 -19.8 -20.8 -22.1 -28.9Stated tax -59.6 -68.5 -78.7 -82.1 -79.5 -85.8 -94.7 -16.9 -17.7 -19.0 -25.9Minority interest 0.0 0.2 -0.2 -0.2 -0.0 0.0 0.0 0.0 0.0 -0.0 0.0Pro forma net income 126.8 162.8 212.7 199.4 195.2 206.9 225.7 42.1 43.9 47.3 61.9Stated net income 115.9 141.0 175.4 177.0 169.3 182.7 201.6 35.9 37.5 40.7 55.2Stated EPS (basic) 1.35 1.64 2.06 2.05 1.95 2.11 2.32 0.41 0.43 0.47 0.64Stated EPS (fully diluted) 1.35 1.64 2.05 2.03 1.95 2.10 2.32 0.41 0.43 0.47 0.64Pro forma EPS (basic) 1.48 1.89 2.50 2.31 2.25 2.38 2.60 0.49 0.51 0.54 0.71ModelWare EPS (fully diluted) 1.47 1.89 2.49 2.29 2.25 2.38 2.60 0.48 0.51 0.54 0.71Shares in issue (basic) 85.8 86.0 85.1 86.2 86.8 86.8 86.8 86.8 86.8 86.8 86.8Shares in issue (fully diluted) 86.0 86.1 85.5 87.2 86.9 87.0 87.0 87.0 86.8 87.0 87.0% change YoYETS licences l-f-l -2.8 -14.6 5.5 -22.0 2.7 -1.4 -2.0 -7.1 14.7 -8.8 13.5webMethods licences pro forma l-f-l 16.6 7.7 6.7 3.8 17.8 12.8 10.0 -10.0 40.5 15.5 24.1Total licences l-f-l 4.6 -10.5 6.4 -8.3 9.4 7.3 5.8 -9.8 27.0 3.7 18.1Total licences yoy 12.7 -0.8 21.3 -9.8 12.2 6.6 5.8 -8.4 31.7 7.8 19.4Total revenues l-f-l 4.3 -3.2 -0.3 -0.4 -5.8 4.0 4.7 -8.0 -3.0 -9.9 -2.1Total revenues yoy 14.4 17.9 31.5 -2.0 -3.3 3.3 4.7 -6.6 0.6 -6.3 -1.0MS EBITA 15.4 27.1 28.8 -6.4 -2.9 4.4 6.4 -5.3 -0.4 -13.0 6.5Stated EPS (fully diluted) 30.5 21.5 25.4 -1.2 -4.0 7.9 10.3 -10.9 -2.7 -11.8 8.0MS EPS (fully diluted) 14.4 28.2 31.7 -8.2 -1.8 5.9 9.1 -7.1 0.1 -9.7 8.8 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

51



Exhibit 65

Software AG Balance Sheet Y/E Dec 31 FY FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012eTotal debtors 274.4 378.3 390.3 357.3 327.8 343.3 361.2 353.4 356.3 348.6 327.8Current assets (Ex. Cash) 274.5 379.0 391.7 357.8 328.2 343.7 361.7 353.6 356.4 348.8 328.2Total creditors -81.0 -135.1 -128.5 -146.7 -125.9 -128.7 -137.2 -134.7 -124.0 -108.8 -125.9Tax provision -36.7 -42.3 -53.1 -20.2 -19.0 -19.0 -19.0 -20.7 -5.1 -19.0 -19.0Deferred revenue -100.5 -117.3 -127.9 -105.3 -104.2 -115.4 -123.1 -140.5 -156.4 -142.1 -104.2Total current liabilities (ex. Debt and provisions -218.2 -294.7 -309.6 -272.2 -249.2 -263.1 -279.3 -296.0 -285.6 -269.9 -249.2

NWC (including current provisions) -12.7 -8.1 -57.6 2.3 2.9 4.4 6.2 -3.0 5.1 2.7 2.9% of sales -2% -1% -5% 0% 0% 0% 1% -1% 2% 1% 1%

Fixed Assets 47.0 67.1 66.4 65.4 64.4 65.7 67.0 64.2 63.6 63.8 64.4Goodwill and Intangibles 593.6 919.1 949.9 1,000.4 976.7 941.2 905.7 978.8 1,007.5 986.4 976.7Financial assets 6.5 5.7 5.3 3.4 17.0 17.0 17.0 3.0 2.9 17.0 17.0LT receivables 25.8 38.4 63.4 18.4 21.3 21.3 21.3 12.6 12.2 21.3 21.3Deferred taxes 66.7 25.1 21.5 18.7 16.2 19.6 32.9 16.7 14.7 15.1 16.2Net capital employed 726.9 1,047.2 1,048.9 1,108.7 1,098.4 1,069.2 1,050.0 1,072.3 1,106.1 1,106.3 1,098.4

Cash 96.9 218.1 102.5 216.5 223.7 396.2 425.5 272.3 270.0 274.7 223.7Securities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Short term debt -61.4 -198.5 -136.8 -26.1 -25.0 -25.0 0.0 -30.2 -26.3 -50.8 -25.0Long term debt -105.8 -291.4 -132.9 -251.3 -125.0 -125.0 0.0 -248.4 -258.5 -213.4 -125.0Net cash/(-debt) -70.3 -271.8 -167.2 -60.9 73.7 246.2 425.5 -6.3 -14.8 10.5 73.7

Other liabilities -0.4 -1.3 -4.3 -9.3 -5.8 -5.8 -5.8 -9.0 -5.1 -5.8 -5.8LT provisions -14.0 -27.5 -15.7 -11.5 -11.1 -11.1 -11.1 -7.8 -10.8 -11.1 -11.1Deferred income -2.6 -2.8 -2.0 -0.7 -0.8 -0.8 -0.8 -0.8 -0.6 -0.8 -0.8Deferred taxes -73.8 -66.7 -47.4 -36.7 -34.3 -34.3 -34.3 -36.0 -36.8 -34.3 -34.3Pension liability -16.7 -29.6 -42.9 -38.2 -37.9 -37.9 -37.9 -37.9 -38.1 -37.9 -37.9Non-current liabilities -107.4 -127.9 -112.3 -96.4 -89.9 -89.9 -89.9 -91.4 -91.4 -89.9 -89.9

Shareholders interest 549.1 647.5 769.3 951.5 1,082.2 1,225.5 1,385.6 974.6 999.9 1,027.0 1,082.2 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

52



Exhibit 66

Software AG Cash Flow Statement Y/E Dec 31 FY FY FY FY FY FY FY Q1 Q2 Q3 Q4EURm 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012 2012 2012eNet income 115.9 140.8 175.6 177.2 169.3 182.7 201.6 35.9 37.5 40.7 55.2Taxes 54.8 65.5 72.7 71.1 72.9 82.4 90.9 15.6 15.4 17.1 24.8Interest 5.1 8.9 14.2 9.9 6.4 2.2 -6.0 2.1 1.9 1.4 1.1Depreciation 11.1 11.2 13.5 13.4 12.3 12.7 13.3 3.3 3.3 2.9 2.9Amortisation of intangibles 14.5 27.8 32.9 32.9 38.1 35.5 35.5 9.2 9.5 9.7 9.7Non-cash income/ expense 5.0 -29.1 7.1 6.5 2.5 0.0 0.0 0.1 2.7 -0.3 0.0Cash from operations 206.3 225.1 316.0 311.0 301.5 315.5 335.3 66.1 70.3 71.5 93.7as % of sales 29% 26% 28% 28% 28% 29% 29% 26% 27% 28% 32%

Change in working capital -15.9 62.0 2.6 16.4 -6.7 -1.6 -1.8 9.0 5.7 -21.2 -0.2Income taxes paid -45.2 -76.7 -79.0 -120.3 -87.4 -85.8 -104.2 -14.6 -28.2 -18.7 -25.9Net interest received/-paid -5.1 -9.9 -12.2 -8.4 -7.3 -2.2 6.0 0.6 -4.0 -2.8 -1.1Net cash used in/ provided by operating activit 140.1 200.5 227.5 198.6 200.2 225.9 235.4 61.0 43.8 28.7 66.6as a % of sales 19% 24% 20% 18% 19% 21% 20% 24% 17% 11% 23%as a % of EBITA 71% 80% 75% 66% 68% 74% 72% 95% 66% 41% 72%

Cash received from sale of fixed assets 2.5 1.4 1.7 2.0 0.5 0.0 0.0 0.1 0.3 0.1 0.0Cash received from sale of financial assets 3.1 3.7 6.9 2.9 0.1 0.0 0.0 0.5 0.3 -0.7 0.0Investments in financial assets -1.0 -2.8 -5.8 -1.4 -1.2 0.0 0.0 -0.4 -0.2 -0.5 0.0Capex -11.3 -14.4 -12.5 -14.4 -10.9 -14.0 -14.7 -2.1 -2.3 -3.1 -3.5Acquisitions -38.9 -320.4 -53.9 -58.2 -16.9 0.0 0.0 -0.4 -16.5 0.0 0.0Cash from investment -45.5 -332.5 -63.6 -69.1 -28.4 -14.0 -14.7 -2.3 -18.5 -4.1 -3.5

Issue of shares 1.8 1.5 0.2 34.6 0.5 0.0 0.0 0.0 0.0 0.5 0.0Payment of dividend -28.5 -31.5 -32.8 -37.2 -40.1 -39.4 -41.4 -0.2 -39.9 0.0 0.0Cash from financing -26.7 -30.0 -65.4 -22.4 -39.6 -39.4 -41.4 -0.2 -39.9 0.5 0.0

FX -2.7 -6.2 8.0 1.4 0.8 0.0 0.0 -1.6 4.3 -1.9 0.0Other -2.5 -33.2 -1.9 -2.2 1.7 0.0 0.0 -2.3 1.9 2.1 0.0Change in net cash 62.7 -201.4 104.5 106.3 134.6 172.5 179.3 54.7 -8.5 25.3 63.2 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

53



Risk-Reward Snapshot: Steria (TERI.PA, OW, PT €19)

Stock pricing most uncertainties regarding UK Public Sector

WARNINGDONOTEDIT_RRS4RL~TERI.PA~

€19.00 (+28%)

€ 14.82

€10.00 (-33%)

€29.00 (+96%)

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Price Target (Jan-14) Historical Stock Performance Current Stock Price Source: Thomson Reuters(historical share price data), Morgan Stanley Research estimates

Price Target €19 (from €17)

We value Steria on 8x our Base Case 2014 EPS, which is the mean P/E

multiple over the last 5 years.


10x Bull Case 14e PE

Stronger recovery and Steria takes market share. Steria’s top line

grows 4.5% in 2013 and 5% in 2014, in a stronger than expected

recovery with Steria gaining share thanks to its mature Shared

Services/Offshoring platform and expanding Application Infrastructure

business. We model margins at 6.5% in 2013 and 7% in 2014 (MS basis).

On a 10x PE multiple (mean of the last 5 years plus one standard

deviation) our bull case value is €29 on a €2.94 2014 EPS.

Base Case €19 (from €17)

8x Base Case 14e PE

Sustained recovery / UK public spending cuts. We assume revs up

2.8% in 2013 and 3% in 2014. Margins increase to 6.1% in 2013 from

5.5% in 2012 and continue rising to 6.5% in 2014 after further successful

cost cutting. We use an 8x PE multiple, which is the historical mean over

the last 5 years on our €2.59 2014 EPS, which values Steria at €19.


0.3x Bear Case 14e Sales

Another tough year. Top line only grows 4% in 2012 and decreases by

-2% in 2013e (more than most cyclical peers as we assume Public sector

cuts are tougher than expected). We use a 0.25x EV/Sales multiple as a

bear case trough multiple (as the stock reached a 0.27x trough multiple

EV/Sales in 2008/09).

Why Overweight?

• Trading at 6x: Steria trades at a 6.1x CY13e multiple, a -37% discount to the European Services average

• Strength in growth areas and offshoring: Steria has a strong position in BPO, a higher growth area, and significant offshore presence, allowing it more cost control than competitors.

• Consistent management response: While execution is not always consistent, management response to periods of underperformance has been more impressive and has, historically, been effective.

• UK Public Sector budget cuts could also open opportunities. We see market share gain opportunities for Steria in the UK, demonstrated by the +8% organic growth in Q2 2012 in spite of public sector budget constraints.

Key Risks to our Price Target • Public sector & Financial Services

slowdown.

• Contract execution risks.

• Debt: While debt levels are not currently a concern, Steria is a more leveraged company in comparison to the sector. If FCF was below expectations, we would pay attention to covenant ratios.

Key Value Drivers • UK & European macro conditions.

• EUR/GBP: Steria has 40% of its revs in the UK (and 60% of profits).

• EUR/INR: With 25% of employees in India, INR depreciation is a positive for margins.

Potential Catalysts

• FY12 results

54



Steria Models

Exhibit 67

Steria Profit and Loss Account Y/E 31 Dec FY FY FY FY FY FY FY FY H1 H2Euro m 2007 2008 2009 2010 2011 2012e 2013e 2014e 2012 2012eSales 1,416.2 1,765.7 1,630.0 1,692.7 1,747.7 1,832.9 1,884.9 1,941.4 905.6 927.3Cost of sales (259.4) (308.3) (283.7) (303.0) (324.2) (351.1) (354.4) (365.0) (186.0) (165.1)Gross Margin 1,156.7 1,457.4 1,346.2 1,389.6 1,423.5 1,481.8 1,530.5 1,576.4 719.6 762.2

Steria Pro forma EBIT (pre s.o. & exceptionals) 103.7 135.5 118.9 120.4 129.9 113.4 128.5 140.6 48.0 65.3Stock option charges (3.9) (3.6) (2.9) (2.0) (2.6) (2.8) (3.8) (3.9) (0.9) (1.9)MS Pro forma EBIT (post s.o. & pre exceptionals) 95.5 123.9 105.9 109.5 115.8 101.5 115.4 127.1 42.6 58.9Acquisition charges (1.2) (5.1) (4.6) (4.7) (4.7) (5.6) (4.8) (4.8) (3.2) (2.4)Other exceptional items (2.9) (16.8) (19.4) (32.1) (40.7) (18.3) (9.4) (9.7) (5.3) (13.0)Stated EBIT 95.7 110.0 92.1 81.6 81.9 86.7 110.5 122.2 38.6 48.1

Net Interest (16.3) (24.5) (20.5) (20.9) (7.2) (9.2) (20.5) (12.0) (4.2) (5.0)

Pro forma profit before tax 79.2 99.4 85.4 88.5 108.6 92.3 94.9 115.1 38.4 53.9Stated profit before tax 79.4 85.5 71.6 60.7 74.7 77.5 90.0 110.2 34.4 43.1

Pro forma tax (28.5) (36.3) (25.1) (26.4) (33.0) (23.3) (29.4) (35.7) (9.3) (14.0)Stated tax (28.0) (33.1) (23.6) (18.3) (21.0) (20.5) (27.9) (34.2) (8.4) (12.0)Associates (0.3) (2.1) 0.8 1.6 1.5 0.2 0.2 0.2 0.1 0.1Minority interests (0.2) 0.5 (0.5) (0.5) (0.1) (1.4) (0.5) (0.5) (1.2) (0.2)Profit/(Loss) from discontinued activities (0.9) 0.8 0.0 0.0 0.0 (1.6) 0.0 0.0 (1.0) (0.6)

Pro forma net income 49.3 62.2 60.5 63.3 77.0 66.1 65.2 79.1 27.0 39.1Stated net income 50.0 51.6 48.3 43.5 55.0 54.2 61.8 75.7 23.8 30.3

Average number of shares in issue 21.0 27.0 27.2 28.0 28.7 29.7 29.7 30.3 29.4 29.9Fully diluted avg no of shares in issue 21.9 31.4 31.7 32.4 33.1 34.1 30.5 30.5 33.7 34.5

Stated EPS 2.39 1.91 1.78 1.56 1.92 1.82 2.08 2.50 0.81 1.01Fully Diluted stated EPS 2.29 1.64 1.52 1.34 1.66 1.59 2.03 2.48 0.71 0.88Pro-forma EPS 2.35 2.31 2.23 2.26 2.68 1.94 2.20 2.61 0.77 1.16ModelWare EPS 2.26 1.98 1.91 1.95 2.32 1.92 2.14 2.59 0.77 1.15Adjusted Diluted EPS for Consensus 2.50 2.09 2.10 2.09 2.52 2.02 2.43 2.90 0.83 1.19

Dividend per share 0.42 0.42 0.12 0.24 0.35 0.19 0.19 0.20 0.00 0.00

Growth Rates (%)Sales 12.2 24.7 (7.7) 3.8 3.2 4.9 2.8 3.0 4.7 5.1Sales (l-f-l) 3.8 0.7 (3.4) 2.2 3.7 0.3 2.3 3.0 1.3 (0.7)Pro forma EBIT 15.7 30.7 (12.2) 1.3 7.9 (12.7) 13.4 9.4 (16.6) (9.7)Stated EBIT 18.0 14.9 (16.3) (11.4) 0.3 5.9 27.5 10.5 11.8 1.5Pro-forma Net Income (12.6) 26.3 (2.8) 4.6 21.6 (25.2) 13.3 21.3 0.4 0.0

Margins (%)Gross Profit 81.7 82.5 82.6 82.1 81.4 80.8 81.2 81.2 79.5 82.2Steria Pro forma EBIT (pre s.o. & exceptionals) 7.3 7.7 7.3 7.1 7.4 6.2 6.8 7.2 5.3 7.0MS Pro forma EBIT (post s.o. & pre exceptionals) 6.7 7.0 6.5 6.5 6.6 5.5 6.1 6.5 4.7 6.3Stated EBIT 6.8 6.2 5.7 4.8 4.7 4.7 5.9 6.3 4.3 5.2


55



Exhibit 68

Steria Cash Flow Statement Y/E 31 Dec FY FY FY FY FY FY FY FYEuro m 2007 2008 2009 2010 2011 2012e 2013e 2014e Net Income 50.2 51.1 48.8 44.0 55.1 55.6 62.3 76.2Share of associates 0.3 2.1 (0.8) (1.6) (1.5) (0.2) (0.2) (0.2)Depreciation, amortisation and provisions 31.3 41.6 56.1 51.0 36.6 44.9 40.8 51.9Share-based payment expense 3.9 3.6 2.9 1.9 2.6 0.9 3.8 3.9Gains and losses on disposals (6.5) 0.7 0.9 0.4 (2.1) 0.0 0.0 0.0Others (0.3) (6.3) (0.7) 3.0 5.9 0.0 0.0 0.0

P&L tax expense 28.0 33.1 24.1 18.1 21.0 20.5 27.9 34.2Cash tax expense (40.8) (10.9) (18.5) (15.3) (18.7) (25.9) (27.9) (34.2)P&L interest expense 13.2 20.1 14.0 10.6 1.6 7.2 16.5 12.0Cash interest expense (18.8) (19.1) (17.9) (9.6) (5.3) (5.6) (16.5) (12.0)

Cash Flow from fully Consolidated Compani 60.7 116.1 108.9 102.4 95.3 97.4 106.7 131.8Change in Net Working Capital 49.2 14.4 (2.3) 21.9 (43.6) (28.3) (13.4) (1.4)Cash Flow from Operations 109.8 130.4 106.5 124.3 51.7 69.1 93.3 130.4

Capex (20.4) (18.4) (9.9) (13.4) (35.5) (25.5) (21.5) (32.6)Acquire/Dispose PPE/intangible assets (8.9) (11.4) (12.4) (11.7) 2.4 (5.0) 0.0 0.0Acquire/Dispose investments 0.2 (0.0) 0.1 0.0 (1.3) 0.0 0.0 0.0Acquisition/Disposals (749.2) 1.4 0.0 0.0 (0.7) (0.0) 0.0 0.0Other (4.5) 0.5 4.8 (1.3) (1.8) (1.8) 0.0 0.0Cash Provided by Investing Activities (782.7) (28.0) (17.5) (26.4) (36.9) (32.3) (21.5) (32.6)

Capital increase 223.7 3.5 11.5 8.8 6.8 0.0 0.0 0.0Dividends (7.6) (13.2) (13.6) (11.0) (14.9) (8.7) (5.7) (5.8)Treasury shares (0.4) (1.2) 0.4 (0.2) (1.0) 0.0 0.0 0.0Issue convertible 152.4 0.0 0.0 0.0 (1.0) 0.0 (150.3) 0.0Pensions (14.6) (28.5) (37.8) (16.8) (18.6) (13.9) (10.0) (5.0)Cash from Financing 353.6 (39.4) (39.5) (19.1) (28.6) (22.6) (165.9) (10.8)

FX Movements (3.7) (19.5) 10.0 11.9 (12.4) 0.0 0.0 0.0Other 15.3 28.0 (11.2) (4.9) 0.6 (3.5) 0.0 0.0

Change in Net Debt (307.7) 71.6 48.3 85.8 (24.7) (2.3) (94.1) 87.0

Cash Flow MetricsDepreciation as a % of sales 2.2 2.4 3.4 3.0 2.1 2.4 2.2 2.7Capex as a % of sales (1.4) (1.0) (0.6) (0.8) (2.0) (1.4) (1.1) (1.7)Capex/Depreciation (65.1) (44.3) (17.7) (26.3) (97.0) (56.8) (52.7) (62.8)

Cash Flow from Operations (CFO)/Sales 7.8 7.4 6.5 7.3 3.0 3.8 5.0 6.7Free Cash Flow (CFO + Capex)/Sales 6.3 6.3 5.9 6.6 0.9 2.4 3.8 5.0CFO/EBITA 114.8 118.6 115.6 152.3 63.1 79.7 84.4 106.7Free Cash Flow/EBITA 93.5 101.8 104.8 135.8 19.8 50.3 65.0 80.1


56



Exhibit 69

Steria Balance Sheet Y/E 31 Dec FY FY FY FY FY FY FY FYEuro m 2007 2008 2009 2010 2011 2012e 2013e 2014e

Trade accounts receivable 334.6 281.3 281.4 271.0 299.5 314.6 325.7 335.4Other current receivables 251.0 269.4 100.0 263.0 278.6 198.0 215.9 222.2Total current assets 585.6 550.7 381.5 534.0 578.0 512.7 541.6 557.6

Trade accounts payable (175.2) (134.5) (148.4) (145.7) (152.2) (152.4) (164.2) (169.1)Other current liabilities (394.8) (409.7) (422.8) (428.4) (439.2) (322.1) (330.1) (339.1)Total current liabilities (569.9) (544.2) (571.2) (574.1) (591.4) (474.5) (494.3) (508.2)

Net Working Capital 15.7 6.5 (19.5) (40.1) (13.3) 10.7 24.1 25.5

Net TFA 103.6 85.5 74.0 70.4 58.6 59.7 61.2 62.8Net Intangibles 81.6 62.1 66.3 67.0 71.1 93.5 75.7 57.8Net Goodwill 831.2 672.0 706.4 728.0 744.5 786.0 786.0 786.0Associates/Other financial assets 22.4 17.7 10.2 11.2 14.4 5.6 5.8 6.0Deferred taxes 26.5 15.3 10.5 14.1 27.3 32.5 32.5 32.5Other non-current/assets held for sale 4.9 7.8 46.9 49.9 73.0 74.7 74.7 74.7

Total Capital Employed 1,085.8 866.8 894.9 900.5 975.6 1,062.7 1,060.0 1,045.3

Cash and cash equivalents 147.2 141.1 149.9 177.2 170.4 139.6 139.6 139.6Financial debt - ST (66.2) (50.6) (66.9) (74.3) (32.6) (59.4) (59.4) (59.4)Financial Debt - LT (387.8) (325.8) (270.0) (204.1) (263.6) (208.4) (302.5) (215.5)Net cash / (Net debt) (306.9) (235.3) (187.0) (101.2) (125.9) (128.2) (222.3) (135.3)

Hybrid convertible (149.3) (150.3) (150.3) (150.3) (150.3) (150.3) 0.0 0.0Pension liabilities (68.5) (39.9) (33.7) (35.1) (40.2) (36.4) (26.4) (21.4)Other provisions and liabilities (32.9) (46.1) (39.7) (41.0) (43.0) (63.0) (66.0) (69.0)

Shareholder's equity 526.2 394.7 482.9 571.1 614.2 678.3 738.3 812.1

Minority Interests (2.0) (0.6) (1.3) (1.9) (1.9) (6.5) (7.0) (7.5) e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

57



Temenos (TEMN.S, Overweight, PT SFr19, up from SFr 13) Most significant potential for investor driven re-rating

WARNINGDONOTEDIT_RRS4RL~TEMN.S~

SFr19.00 (+13%)SFr 16.75

SFr12.00 (-28%)

SFr28.00 (+67%)

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SFr


Price Target SFr19 We use a 16x P/E multiple, applied to 2014e EPS to reach our PT.

Bull Case SFr28 (from SFr22)

21x Bull Case FY14e EPS

Temenos returns to stronger growth, after a disappointing FY2012. Our bull case assumes Temenos manages to return to license revenue growth of +12% in 2013e and +15% in 2014e. We assume margins rise to 21.4% in FY13e, and 22.9% in FY14e (MS Basis) resulting in an FY14e EPS of $1.33. Our P/E multiple is based on the average P/E for the last 5 years, plus one standard deviation of this mean.

Base Case SFr19 (from SFr13)

17x Base Case FY14e EPS

Licence growth uncertain; return to growth expected by FY13e. Given the poor macro conditions, and uncertainty around new license growth, we model a conservative +3% licence growth for FY13e and +8% for FY14e. We value our base price target using a 17x P/E multiple (5 year average) on our FY14e base case EPS.

Bear Case SFr12 (from SFr10)

4x EV/Recurring revenues FY14e

Negative licence growth and management change. For our Bear case valuation, we use a trough multiple of 4x EV/Recurring revenues applied to bear case 2014e maintenance revenues, reflecting the uncertain macro environment, execution issues the company has had and risks due to the recent management changes.

Source: Morgan Stanley research estimates, FactSet

Why Overweight? • Risk / Reward weighted to the

upside: Temenos now offers 67% upside to our bull case vs. 28% to our bear case. This gives the company an attractive risk / reward and the potential for higher returns in a sector where we expect performance to be more muted after a very strong 2012.

• Company with strongest turnaround potential: After a series of profit warnings, sharp licence declines and two management changes we believe Temenos is the company where investor perception can change the most – potentially driving a meaningful re-rating.

• Easier comps, cost cutting and new management team help: Temenos now enters a period of materially easier base comparisons on new licences. Growth in maintenance and a cost cutting program should deliver significant EPS growth in 2013 even without licence growth. New CEO David Arnott’s focus on sales execution could also start to benefit new licences.

Risks to our PT / Rating • Lack of visibility in the

business: The banking market remains difficult, particularly in Europe. Banks may remain reluctant to change core banking platforms and competition from SAP, Oracle, TCS and Infosys has increased.

• Balance Sheet concerns: Investors have been concerned about high working capital balances and weak cash conversion – Temenos needs to continue the improvements as the business returns to growth.

Catalysts • FY12 Results

58



Temenos Models

Exhibit 70

Temenos P&L Statement Y/E Dec 31 FY FY FY FY FY Q1 Q2 Q3 Q4USDm 2009 2010 2011 2012e 2013e 2012 2012 2012 2012eLicences 126 160 146 119 123 23 24 30 42% change -16 27 -9 -18 3 -16 -38 -21 2% change l-f-l -6 19 -16 -17 3 -15 -36 -19 2Maintenance 117 155 197 200 211 49 50 50 51Services 127 133 130 128 131 28 31 30 38Total revenues 370 448 473 447 465 100 106 110 131% change -9 21 6 -5 4 (3) (14) (9) 4% change organic -10 7 -6 -4 3 (2) (11) (6) 4

Gross profit on services 22 (4) (22) (10) 8 (9) (5) (4) 8as a % of sales 18 (3) (17) (8) 6 (31) (17) (13) 22

R&D (62) (89) (119) (104) (102) (26) (26) (25) (26)Sales & Marketing (72) (83) (133) (83) (87) (20) (21) (20) (22)General & Admin (51) (65) (70) (69) (60) (22) (15) (19) (12) - of which stock option costs (17) (18) (12) (11) (12) (3) (3) (3) (3)

Stated EBIT 80 74 (2) 54 92 (5) 7 12 41as a % of sales 21.7 16.5 (0.4) 12.1 19.9 (5.3) 6.5 11.0 30.8Exceptional items / Restructuring (3) (25) (72) (17) 0 (8) (1) (5) (3)Amortisation (of R&D and intangibles) 23 31 37 40 42 9 11 11 9Capitalised R&D expense (20) (22) (38) (40) (40) (10) (10) (10) (11)Temenos adj. EBIT (pre amort., restructuring) 91 114 88 84 105 6 11 21 46as a % of sales 24.7 25.4 18.5 18.7 22.6 6.3 10.2 18.8 35.1MS EBIT (adjusted for R&D capitalisation) 87 108 69 71 95 3 9 18 41as a % of sales 23.4 24.1 14.5 15.9 20.5 2.7 8.3 16.8 31.3

Net interest income/(expense) (8) (13) (9) (7) (6) (2) (2) (2) (2)FX gain/(loss) (4) 1 (5) (3) 0 (2) (1) 0 0Other financial 0 0 0 0 0 0 0 0 0Stated profit before tax 69 62 (16) 43 86 (9) 4 10 39Adj profit before tax 75 96 55 60 89 (1) 6 16 39Tax (0) (0) (12) (16) (16) (2) (4) (3) (7)Tax rate (%) (0) 0 76 (36) (18) 23 (101) (31) (17)Minority interest (0) (0) (0) 0 0 0 0 0 0Stated net income 69 62 (28) 28 71 (11) (0) 7 32MS Adj net income 75 96 46 49 73 (0) 3 14 33MS Adj net income (adj. for convertible) 81 102 46 49 73 (0) 3 14 33Temenos adjusted net income 85 108 62 56 81 0 4 15 37

Shares in issue - fully diluted & convertible 70 73 69 70 72 70 70 70 70Stated fully diluted EPS 1.10 0.93 (0.41) 0.40 0.99 (0.16) (0.00) 0.10 0.46Stated fully diluted EPS (incl. convertible) 1.07 0.92 (0.41) 0.40 0.99 (0.16) (0.00) 0.10 0.46Temenos adjusted EPS (for convertible) 1.22 1.47 0.89 0.81 1.13 0.00 0.05 0.22 0.52% change 10 20 (40) (9) 40 (94) (80) (14) 75ModelWare EPS (adjusted for convertible) 1.16 1.39 0.67 0.70 1.02 (0.00) 0.04 0.20 0.46% change 15 20 (52) 6 46 (105) (83) 8 131


59



Exhibit 71

Temenos Cash Flow Statement Y/E Dec 31 FY FY FY FY FY Q1 Q2 Q3 Q4USDm 2009 2010 2011 2012e 2013e 2012 2012 2012 2012eProfit before tax 69 62 (16) 43 86 (9) 4 10 39Depreciation and amortisation 30 40 47 46 49 12 12 12 11Stock option charges 17 18 12 11 12 3 3 3 3Other non cash items 16 1 12 12 6 5 3 3 2Change in net working capital (14) 5 47 2 (10) (25) (35) (16) 78Income taxes paid (5) (3) (3) (12) (12) (5) (2) (1) (4)Temenos net cash from operations 113 123 99 103 131 (19) (15) 10 128as a % of sales 30 27 21 23 28 (19) (15) 9 97as a % of EBITDA 102 108 221 102 93 (294) (82) 43 250

Capex (2) (3) (5) (6) (7) (1) (1) (2) (1)Sale PPE 0 1 0 0 0 0 0 0 0Purchase intangibles (3) (3) (5) (3) (2) (1) (1) (1) (1)Capitalised development (20) (22) (38) (40) (40) (10) (10) (10) (11)Acquistions (85) (82) (1) (2) 0 (2) 0 0 0Disposals 0 4 0 0 0 0 0 0 0Cash from financial instruments (2) (5) (0) (9) 0 (2) 1 (8) 0Interest received 0 0 0 1 2 0 0 0 1Cash from investing (111) (111) (50) (60) (47) (16) (11) (20) (13)

Share issuance 2 3 0 0 0 0 0 0 0Bond costs 0 0 0 0 0 0 0 0 0Share buy-back 0 (10) (113) 0 0 0 0 0 0Interest payments (3) (7) (5) (6) (6) (2) (1) (1) (2)Other financial expenses (2) (6) (4) (1) (0) (0) (0) (0) (0)Other 6 96 0 0 0 0 0 0 0Cash from financing 2 76 (123) (7) (7) (2) (2) (2) (2)

FX (14) 20 (3) 0 0 1 (1) 1 0Change in net (debt)/cash (10) 109 (76) 36 78 (37) (29) (11) 113Free Cash Flow 88 91 50 51 80 (32) (28) (3) 114


Exhibit 72

Temenos Balance Sheet Y/E Dec 31 FY FY FY FY FY Q1 Q2 Q3 Q4USDm 2009 2010 2011 2012e 2013e 2012 2012 2012 2012eNet working capital 97 43 (35) (21) (11) (2) 34 56 (21)as a % of (annualised) sales 26 10 (7) (5) (2) (0) 8 13 (4)

Tangible Fixed Assets 16 15 13 14 10 14 14 14 14Intangible assets 288 407 404 410 415 415 402 407 410Long-term receivables 18 34 49 38 38 44 41 38 38Deferred taxes 35 38 34 29 29 32 30 29 29Net capital employed 453 536 466 470 480 503 521 545 470

Net cash/(debt) (131) (22) (99) (63) 15 (136) (165) (176) (63)

Deferred tax liability (16) (13) (8) (8) (12) (8) (7) (5) (8)Other long-term payables (6) (8) (10) (10) (11) (10) (9) (9) (10)

Shareholder's equity 300 492 348 389 472 350 341 354 389Minority interest 1 1 0 0 0 0 0 0 0


60



Tieto (TIE1V.HE, EW, PT €15 from €12)

Looking for evidence of margin expansion without restructuring charges

WARNINGDONOTEDIT_RRS4RL~TIE1V.HE~

€15.00 (-3%)

€ 15.40

€10.00 (-35%)

€22.00 (+43%)

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methodology to 2014 and now value Tieto on 11x our 2014 EPS which

is the average multiple since 2007.



Good turnaround in a growing market:

• FY14 Revenue growth: +5%, reflecting a growing market

• FY14 Margin: 8% vs. Tieto’s double digit long-term objective

• FY14 earnings: €1.62

• P/E multiple: 13x, based on the historical average since 2007

plus one standard deviation.

Base Case €15 (from €13)


Slow growth but margin pressure remains:

• FY14 Revenue growth: +2.7%, reflecting a moderate growth

market

• FY14 Margin: 7.5%, reflecting some benefits from the current

restructuring program and vs. 6.1% in 2012e.

• FY14 earnings: €1.35

• P/E multiple: 11x, based on the historical average P/E for Tieto

since 2007, inline with our approach for other stocks in this

sector.


0.4x EV/Sales on Bear Case 2014e revenues

Slow recovery:

• FY14 Revenue growth: -1%, reflecting a contracting market, and

worsening pricing pressure in Finland and Scandinavia.

• EV/Sales multiple: 0.4x, reflecting trough levels of 0.37x in

January 2009.

Source: ThomsonReuters (historical share price data), Morgan Stanley Research estimates

Why Equal-weight?

1) Core business has been under pressure: Tieto has a strong position in Finland (41% of revs) but faces competition both here and in Sweden (30%). We see risks to margins and top line given: 1) difficulties at large clients (e.g. Nokia), 2) Tieto’s lack of scale / differentiation outside Finland and Sweden leads to market share loss / margin erosion in these markets.

2) Restructuring / disposals help the case: The new restructuring plans and a re-focus on core markets give us more confidence that a turnaround at Tieto is possible. We see the biggest potential for EPS growth from margin expansion in services and believe Tieto is well positioned to achieve this.

3) Renewed M&A interest could provide upside but is unlikely, in our view. Tieto received a €15 per share offer from a private equity group to buy the company in 2007-08. Further M&A interest could make our bull case more feasible but we think it unlikely given the smaller size of Tieto’s core markets and the challenges the company still faces.

Risks to our PT

• We cannot exclude the possibility of another takeover bid which would give the bull case higher probability.

• Market conditions could change, affecting the successful completion of the current restructuring.

Potential Catalysts:

• FY12 results, giving updated progress on restructuring plans into 2013.

61



Tieto Models

Exhibit 73

Tieto Profit and Loss Account (Dec 31, EUR million) 2007 2008 2009 2010 FY11 FY12e FY13e FY14e 1Q12 2Q12 3Q12 4Q12e

Revenues 1,772 1,866 1,706 1,714 1,828 1,833 1,822 1,872 467 456 424 486 - % chg y/y 7.6% 5.3% -8.5% 0.4% 6.7% 0.3% -0.7% 2.7% 1.2% -1.4% 2.2% -0.7% - % chg y/y organic ex fx 9.0% 6.0% -5.8% -1.0% 5.0% 1.6% 0.8% 2.7% 1.0% 0.0% 1.0% -1.0%

Other operating income 13 11 16 18 9 24 7 7 17 3 2 2

EBIT (Tieto Basis pre-restructuring for Consensus) 126 157 108 110 117 133 149 163 27.95 28.18 37.10 40.18 EBIT Margin % 7.1% 8.4% 6.3% 6.4% 6.4% 7.3% 8.2% 8.7% 6.0% 6.2% 8.8% 8.3%

MS EBIT (after ongoing restructuring cost) 105 135 87 89 95 111 127 140 22 23 32 34 EBIT Margin % 5.9% 7.2% 5.1% 5.2% 5.2% 6.1% 7.0% 7.5% 4.8% 5.0% 7.6% 7.1% Reported EBIT 1 112 75 72 98 99 120 133 42 (4) 32 29 EBIT Margin % 0.1% 6.0% 4.4% 4.2% 5.4% 5.4% 6.6% 7.1% 8.9% -0.8% 7.5% 6.1%

Net financial (expense) -10 -29 -5 -6 -7 -6 -4 -1 (2) (2) (0) (2)

PBT (Tieto Basis pre-restructuring for Consensus) 117 128 103 103 110 127 144 161 26 26 37 38

MS PBT (after ongoing restructuring cost) 95 105 82 83 88 105 123 139 20 21 32 32 PBT (reported) (9) 82 70 66 91 93 115 131 40 (5) 32 28

Tax, stated -23 -22 -15 -17 -31 -26 -32 -37 (8) (1) (9) (8) Tax Rate % 29.9% 26.6% 21.6% 25.2% 34.4% 27.4% 28.0% 28.0% 19.2% -26.7% 27.9% 28.0% Tax, Tieto basis for consensus -35 -38 -31 -31 -33 -38 -43 -48 (8) (8) (11) (11) Tax Rate % 29.9% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% Tax, MW -28 -32 -25 -25 -26 -32 -37 -42 (6) (6) (10) (10) Tax Rate % 29.9% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%

Minorities -1 -1 0 0 0 0 0 0 - - - -

Net Income (Tieto Basis pre-restructuring for Cons) 81 89 72 73 77 89 101 113 18 19 26 27 Net Income (after ongoing restructuring cost) 66 73 57 58 62 74 86 97 14 15 22 23 Net Income (reported) -32 60 55 50 60 68 83 95 32 (7) 23 20 Income from discontinued items 0 1 0 0 0 0 0 0 - - - -

Net Profit (Stated) - from all Operations -32 60 55 50 60 68 83 95 32 (7) 23 20

Share Count (m) Weighted Average diluted number of shares 73 72 72 72 72 72 72 72 72 72 72 72

Basic EPS (Tieto Basis pre-restructuring for Cons) 1.11 1.24 1.00 1.02 1.08 1.25 1.41 1.57 0.25 0.26 0.36 0.37 Diluted EPS (Tieto Basis pre- 1.11 1.24 1.00 1.02 1.08 1.24 1.40 1.57 0.25 0.26 0.36 0.37 % change yoy 12.1% -19.4% 1.7% 6.0% 15.2% 13.2% 11.6% MW EPS, Basic (after ongoing restructuring cost) 0.90 1.02 0.80 0.82 0.86 1.03 1.20 1.35 0.20 0.21 0.31 0.32 MW EPS, Diluted (after ongoing 0.90 1.02 0.80 0.82 0.86 1.03 1.19 1.35 0.20 0.20 0.31 0.31 % change yoy 13.3% -21.7% 2.0% 5.8% 19.0% 16.1% 13.2% Basic EPS (reported) -0.44 0.83 0.77 0.70 0.84 0.94 1.16 1.32 0.45 (0.10) 0.32 0.28 Diluted EPS (reported) -0.44 0.83 0.77 0.69 0.84 0.94 1.15 1.31 0.44 (0.10) 0.32 0.28

Dividend Per Share (€) declared 0.50 0.50 0.50 0.70 0.75 0.80 0.81 0.92 - - - - - % chg y/y -58.3% 0.0% 0.0% 40.0% 7.1% 6.5% 1.0% 13.9% 0.0% 0.0% 0.0% 0.0% % of net profit (from continuing operations) -113% 60% 65% 101% 90% 85% 70% 70% 0.0% 0.0% 0.0% 0.0% e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

62



Exhibit 74

Tieto Cash Flow Statement (Dec 31, EUR million) 2007 2008 2009 2010 FY11 FY12e FY13e FY14e 1Q12 2Q12 3Q12 4Q12e

Net Income -31 60 55 50 60 68 83 95 32 (7) 23 20 Minorities 0 0 0 0 0 0 0 0 - - - - Depreciation & Amortisation 117 66 71 79 97 86 84 117 21 21 22 22 Share based payments 2 4 4 4 3 2 3 3 1 1 0 1 Profit / Loss on sale of Fixed Assets & Shares 0 0 -6 1 1 -15 0 0 (15) - - - Other Adjustments 1 -1 0 -1 2 1 0 0 (1) 1 2 - Net Interest (P&L) 10 29 5 6 7 6 4 1 2 2 0 2 Tax (P&L) 23 22 15 17 31 26 32 37 8 1 9 8

Increase in Receivables (includes loan recs + lt recs) 0 0 0 0 0 10 -19 -13 - - - 16 Increase in Creditors 0 0 0 0 0 -22 2 11 - - - (13) Change In Working Capital 8 30 -4 13 -42 -12 -17 -2 17 (17) (14) 2

Net Interest paid/received -1 -6 1 -7 -8 -3 -4 -1 (1) 0 0 (2) Income taxes paid -10 -14 -14 -18 -27 -11 -32 -37 6 (5) (5) (8) Other 0 0 0 0 0 0 0 0 - - - - Cash Flow From Operations 119 191 126 143 123 148 152 213 69 (3) 36 45

Cash flow from investing activities Acquisition of Group companies net of acquired cash -28 -8 -5 -3 -1 -1 0 0 (0) (0) (0) - Capital Expenditure -49 -69 -58 -96 -56 -59 -73 -94 (14) (13) (12) (19) Disposals 5 0 6 4 0 19 0 0 18 2 - - Sale of Fixed Assets 8 3 3 1 0 0 0 0 - 0 0 - Other investing activities -1 -1 1 2 1 -3 0 0 0 0 (4) - Net cash used in investing activities -66 -75 -53 -92 -55 -43 -73 -94 4 (12) (16) (19)

Cash flow from financing activities Paid dividend -89 -36 -36 -36 -50 -54 -57 -58 - (54) - - Purchase of own shares -32 0 -3 0 0 0 0 0 - - - -

Net cash used in other financing activities -12 -3 -5 -5 -6 -4 0 0 (1) (1) (3) - Others/FX -5 -11 -8 7 -42 -1 0 0 (1) 0 (1) -

Net cash used in financing activities -138 -49 -52 -34 -97 -59 -57 -58 (1) (54) (3) -

Change in Net Debt -84 67 22 17 -30 46 22 61 71 (68) 17 25

Opening Net Debt -79 -163 -97 -75 -58 -88 -42 -20 (88) (17) (85) (67) Closing Net Debt -163 -97 -75 -58 -88 -42 -20 41 (17) (85) (67) (42)

MS Free Cash Flow (pre M&A) 70 122 68 47 67 89 79 119 55 (16) 24 25 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

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Exhibit 75

Tieto Balance Sheet (Dec 31, EUR million) 2007 2008 2009 2010 FY11 FY12e FY13e FY14e 1Q12 2Q12 3Q12 4Q12e

Trade & Other receivables 560 499 441 465 470 466 468 479 470 504 480 466 Current Tax Assets 10 14 13 6 15 8 25 28 8 10 10 8 Total Current Assets 570 512 454 472 484 474 493 507 479 513 490 474

Trade & Other Payables -462 -448 -370 -411 -390 -373 -375 -385 (467) (405) (372) (373) Current Tax Liabilities -12 -16 -8 -10 -9 -9 -9 -9 (11) (11) (16) (9) Provisions 0 -29 -43 -40 -30 -30 -30 -31 (20) (43) (38) (30) Total Current Liabilities -473 -492 -422 -461 -430 -412 -414 -425 (497) (459) (425) (412)

Goodwill 416 389 402 423 413 423 423 423 415 417 423 423 Intangibles 66 53 43 51 77 57 37 17 72 67 62 57 PPE 77 101 100 121 103 102 111 107 102 99 100 102 Investments: Assets Held for Resale 2 2 1 1 1 1 1 1 1 1 1 1 Total Fixed Assets 560 544 546 596 594 583 572 548 590 584 586 583

Deferred Tax Assets 66 68 67 63 49 47 47 47 45 47 47 47 Loan Receivables 0 10 5 7 5 6 6 6 5 5 6 6 Trade Investments/JV 0 0 0 0 0 0 0 0 - - - - Other investments 2 0 0 0 41 21 21 21 26 18 21 21 Retirement benefit Assets 0 0 0 5 10 11 11 11 10 11 11 11

Net Capital Employed 725 643 651 681 754 730 737 715 657 718 735 730

Long Term Borrowings -151 -150 -154 -151 -118 -82 -60 1 (114) (110) (107) (82) Short Term Borrowings -97 -67 -44 -5 -66 -16 -16 -16 (65) (65) (16) (16)

Interest bearing current assets 11 0 0 0 0 0 0 0 - - - - Cash at Bank and in Hand 73 120 123 98 96 56 56 56 163 91 56 56 Net Cash/(debt) -163 -97 -75 -58 -88 -42 -20 41 (17) (85) (67) (42)

Total Provisions -84 -63 -57 -66 -102 -89 -89 -89 (91) (88) (89) (89)

Share Capital, share issue premium and other reserves -115 -109 -111 -115 -115 -118 -118 -118 (115) (116) (118) (118) Retained Earnings -358 -373 -407 -443 -450 -481 -510 -549 (434) (430) (461) (481) Total Capital Employed -474 -482 -518 -557 -565 -599 -627 -667 (550) (545) (578) (599) Minorities -4 -2 -1 0 0 0 0 0 (0) (0) (0) (0) Shareholders' Equity -478 -484 -518 -558 -565 -599 -627 -667 (550) (545) (578) (599)

Total Assets 1283 1255 1195 1241 1280 1198 1207 1196 1,317 1,268 1,217 1,198 Total Liabilities 1283 1255 1195 1241 1280 1198 1207 1196 1,317 1,268 1,217 1,198 e = Morgan Stanley Research estimates Source: Company Data, Morgan Stanley Research

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Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Adam Wood. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts.

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Important US Regulatory Disclosures on Subject Companies As of December 31, 2012, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research: Amadeus IT Holdings S.A., SAP AG, Tieto. Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of Amadeus IT Holdings S.A.. Within the last 12 months, Morgan Stanley has received compensation for investment banking services from Amadeus IT Holdings S.A., Capgemini, SAP AG. In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from Amadeus IT Holdings S.A., Atos SA, Aveva Group Plc, Capgemini, Dassault Systemes SA, Indra, Sage, SAP AG, Software AG, Temenos Group AG, Tieto. Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from Amadeus IT Holdings S.A., Capgemini, SAP AG. Within the last 12 months, Morgan Stanley has provided or is providing investment banking services to, or has an investment banking client relationship with, the following company: Amadeus IT Holdings S.A., Atos SA, Aveva Group Plc, Capgemini, Dassault Systemes SA, Indra, Sage, SAP AG, Software AG, Temenos Group AG, Tieto. Within the last 12 months, Morgan Stanley has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following company: Amadeus IT Holdings S.A., Capgemini, SAP AG. Morgan Stanley & Co. LLC makes a market in the securities of SAP AG. The equity research analysts or strategists principally responsible for the preparation of Morgan Stanley Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues. Morgan Stanley and its affiliates do business that relates to companies/instruments covered in Morgan Stanley Research, including market making, providing liquidity and specialized trading, risk arbitrage and other proprietary trading, fund management, commercial banking, extension of credit, investment services and investment banking. Morgan Stanley sells to and buys from customers the securities/instruments of companies covered in Morgan Stanley Research on a principal basis. Morgan Stanley may have a position in the debt of the Company or instruments discussed in this report. Certain disclosures listed above are also for compliance with applicable regulations in non-US jurisdictions.

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Global Stock Ratings Distribution (as of December 31, 2012)

For disclosure purposes only (in accordance with NASD and NYSE requirements), we include the category headings of Buy, Hold, and Sell alongside our ratings of Overweight, Equal-weight, Not-Rated and Underweight. Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold, and sell but represent recommended relative weightings (see definitions below). To satisfy regulatory requirements, we correspond Overweight, our most positive stock rating, with a buy recommendation; we correspond Equal-weight and Not-Rated to hold and Underweight to sell recommendations, respectively.

Coverage Universe Investment Banking Clients (IBC)

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Overweight/Buy 1103 37% 436 41% 40%Equal-weight/Hold 1301 44% 497 46% 38%Not-Rated/Hold 108 4% 27 3% 25%Underweight/Sell 478 16% 111 10% 23%Total 2,990 1071 Data include common stock and ADRs currently assigned ratings. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Investment Banking Clients are companies from whom Morgan Stanley received investment banking compensation in the last 12 months.

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Analyst Stock Ratings Overweight (O). The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (E). The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Not-Rated (NR). Currently the analyst does not have adequate conviction about the stock's total return relative to the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U). The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Unless otherwise specified, the time frame for price targets included in Morgan Stanley Research is 12 to 18 months.

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Industry Coverage:Technology - Software & Services

Company (Ticker) Rating (as of)Price* (01/07/2013)

Adam Wood Amadeus IT Holdings S.A. (AMA.MC)

O (06/08/2010) €18.73

Atos SA (ATOS.PA) O (02/20/2012) €53.22Aveva Group Plc (AVV.L) O (09/17/2010) 2,144pCapgemini (CAPP.PA) O (09/19/2011) €33.48Dassault Systemes SA (DAST.PA) O (09/17/2010) €84.86Indra (IDR.MC) U (01/05/2011) €10.85SAP AG (SAPG.DE) O (02/23/2012) €60.95Sage (SGE.L) E (09/17/2010) 306pSoftware AG (SOWG.DE) U (09/17/2010) €31.64Steria (TERI.PA) O (09/29/2009) €15.14Temenos Group AG (TEMN.S) E (03/29/2012) SFr16.75Tieto (TIE1V.HE) U (11/25/2008) €15.6

Stock Ratings are subject to change. Please see latest research for each company. * Historical prices are not split adjusted.

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