DB ACCESS GERMAN, SWISS & AUSTRIAN CONFERENCE/media/Files/S/... · Portfolio management Enterprise architecture BUSINESS & IT TRANSFORMATION PROCESS IoT Mobile integration integration

DB ACCESS GERMAN, SWISS & AUSTRIAN CONFERENCE

Karl-Heinz Streibich

CEO, Software AG

June 9, 2016

© 2016 Sofware AG. All rights reserved.

2 |

SAFE HARBOR

This presentation includes forward-looking statements based on the beliefs of Software AG

management. Such statements reflect current views of Software AG with respect to future events

and results and are subject to risks and uncertainties. Actual results may vary materially from those

projected here, due to factors including changes in general economic and business conditions,

changes in currency exchange, the introduction of competing products, lack of market acceptance

of new products, services or technologies and changes in business strategy. Software AG does not

intend or assume any obligation to update these forward-looking statements.

This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way

securities of Software AG or any of the companies that are members of the Group at present or in the

future, nor does it form part of such an offer and it should not be understood as such. This presentation

does not constitute an offer of sale of securities in the United States of America. Securities may not be

offered or sold in the United States of America without registration or exemption from registration in

accordance with the U.S. Securities‘ Act of 1933 in its currently valid form.

© 2016 Software AG. All rights reserved.

3 | © 2016 Software AG. All rights reserved.

DIGITAL TRANSFORMATION IS ON EVERY BUSINESS AGENDA

4 |

CORE REASON OF DIGITAL DISRUPTION DIGITAL CHALLENGERS SEPERATE THE CUSTOMERS FROM ESTABLISHED COMPANIES

DIGITAL DISRUPTION

Any industry ... Retail Hotels Banks Insurance



DIGITAL TRANSFORMATION TO DO’S

FROM APPLICATION SILOS TO AN

INTEGRATED PLATFORM

ARCHITECTURE

6 |

FLEXIBILITY

!! DATA QUALITY

!! SECURITY Business

Logic

(Data Center) internal

Systems of records Applications

!! INOVATION Flexibility

! DATA QUALITY

SECURITY

Pervasive

Integration

New digital innovations

customer centric, B2B

(IoT) external

Internet of Things (IoT) platform

(Real time, device and event driven,

streaming analytics)

!! FLEXIBILITY

! DATA QUALITY (MDM)

! SECURITY Integration

Logic

Integration layer for

differentiation & innovation

(Middleware) internal

Integration Centric Architecture

(B2B, ESB, API, Hybrid Cloud)

Business process digitization

Departmental agile Apps/Cloud based

“The new data center extension”: Software platform centricity & IoT private cloud

“The old data center”: Application/Database centricity

1. Integration Centered Enterprise Architecture

2. Real-time, event driven new business models

3. Agile & flexible applications (adaptive apps)

4. Business processes digitization

NEW DIGITAL BUSINESS CAPABILITIES ARE WRITTEN IN SOFTWARE

7 |


5 BUILDING BLOCKS OF THE DIGITAL BUSINESS PLATFORM DIGITAL CAPABILITIES

Business strategy

& planning

Collaboration

Design &

analysis

Risk & compliance

management

Audit

management

Portfolio

management

Enterprise

architecture

BUSINESS & IT

TRANSFORMATION

PROCESS

IoT

integration

INTEGRATION

Pattern

detection

Mobile

enablement

Application

integration

Mobile

integration

In-Memory data

management

Visual

analytics

Business

dashboards

Process

automation

Task

management

B2B

integration

Services

governance

Universal

messaging

Predictive

analytics

Process

discovery

Application

development

Rules

management

API

gateway

Integration

services

Search &

compute

Event

processing

Process

monitoring

Case

management

Process

orchestration

API

portal

Cloud service

integration

Continuous

query

IN-MEMORY

DATA

ANALYTICS &

DECISIONS

8 |

INTERNET OF THINGS ( IOT ) PLATFORM OF SOFTWARE AG

Connected Devices

Enterprise

IoT Solutions

& Applications

Predictive

Maintenance

Smart

Production

Connected

Customer

Smart

Logistics

Development

& Delivery Environment

Application

Development

Portals &

API Gateway

Data

Visualizations

IoT Edge Services Lightweight

Messaging Edge Analytics

Device Connectivity &

Embedded Agents


Business

Systems

&

Partner

Networks

&

Ecosystems

IoT Platform

Services

Agile Business

Process Management

Predictive Analytics &

Machine Learning Streaming Analytics

In-memory

Data Management

Enterprise Integration

Visual

Analytics

Device Management Ad Hoc

Historical Analytics

API Management

+

IoT

Fo

un

dati

on


ENABLING DIGITAL TRANSFORMATION

OPPORTUNITY:

• Leverage the huge revenue potential of the

Internet of Things

• The company appointed Software AG as

the strategic business partner

RESULTS:

• Taking business to the cloud

• High reliability expected—critical for IoT

services for customers

• Improving message delivery across all

production plants worldwide

• Digitizing internal processes

• Significant reduction of downtime

OF A WORLD-LEADING MANUFACTURER

S I N C E P A R T N E R I N G W I T H S O F T W A R E A G :

of annual revenue

Become “one of the world’s leading IoT companies”

80% That’s more than €110 million/day

processed on Software AG’s

DIGITAL BUSINESS PLATFORM

Large global

Supplier of Auto

Components

10 |

TRANSFORMING POSTAL SERVICES


THROUGH INTEGRATION CENTRIC PROCESS AUTOMATION

OPPORTUNITY:

• Customs Affairs Platform to support quick

new market entry

RESULTS:

• Quickly define new market requirements

and local business (process) models

• Faster entry of new markets

• Ensured IT readiness at time of market

entry


FASTER

ENTRY

OF NEW MARKETS

SECURES

GLOBAL GROWTH

Global Postal

Services Company


TRANSFORMING RETAIL WITH THE DIGITAL BUSINESS PLATFORM


OPPORTUNITY:

• Unite newly merged group onto one single

unit based on Digital Business Platform

• Build on previous investment in Software AG

integration technology

RESULTS:

• ONE platform offers all required digital

capabilities

• “Independent Federation Layer”

• Freedom of choice in technology since

Software AG’s platform works with any

system or application ( neutrality )

• Faster implementation with Software AG’s

Global Consulting Services

• Expected 20% increased productivity

20%

ONE DIGITAL PLATFORM

FOR ENTIRE GLOBAL GROUP

PRODUCTIVITY BOOST EXPECTED

NEW DIGITAL

APPS:

FOR RETAIL

& PHARMACY

NO VENDOR LOCK-IN

Global Pharmacy

Retailer


OPTIMIZING B2B INTEGRATION WITH A DIGITAL BUSINESS PLATFORM


OPPORTUNITY:

• Create a world-class B2B

integration solution to meet rapidly

expanding needs

RESULTS:

• Can send/receive 300.000 partner

messages/hour

• Scales easily 10 times—leverages

the cloud for elasticity

• Secure, thanks to regular &

complete security audits

• Managed by Software AG’s Global

Consulting Services

SUPPLY CHAIN

SCALES EASILY Up to 300,000 messages/hour

Secure, high-performance, fully capable

B2B/EDI SOLUTION run by Software AG

One of the world‘s

leading Internet

companies

13 |

HOW WE GOT TO OUR LEADING POSITION


STRATEGY EXECUTION IN 3 STAGES

243 355

432

2003 2010 2006 2015 2020

Revenue in €m: Product Revenue

(Own Products, Group)

DBP

A&N

69

677

351

679

14 |

SOFTWARE AG AT A GLANCE

Technology leader for more than 40 years

in data management and application development platforms

€870+ MILLION IN REVENUE

4,300+ EMPLOYEES WORLDWIDE

€2.5bn MARKET CAP

45%+

recurring

50% new

products

P&L as of December 31, 2015

REVENUE BY BUSINESS LINE

34%

Euro

31%

USD

REVENUE BY CURRENCY

R&D 23%

S&M 20%

~65% Free Float

Consulting

& Services

43%

Admin

14%


A&N

28%

DBP

50%

GCS

22%

15 |

20%

19%

19%

12%

10%

Government Financial Services

IT Services Services

Manufacturing Telco & Media

Transport & Logistics Other

DIVERSIFIED TO BALANCED RISK


EQUAL PRESENCE AMERICAS AND EMEA, ALL INDUSTRIES

Product Revenue by Region Product Revenue by Industry

45%

48%

(14%)

7%

Americas

EMEA (14% Germany)

Asia Pacific

Based on Group product revenue – FY 2015

16 |

DIGITAL BUSINESS PLATFORM


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

A&N

DBP

DBP offering focused on IT digitization segments,

like IoT, streaming analytics etc.

REPRESENTS TWO THIRD OF PRODUCT BUSINESS

17 |

RECURRING REVENUE FOCUS:


0

100

200

300

400

2010 2011 2012 2013 2014 2015

A&N

DBP

353 362 378 369 369

407

47% of Group Revenue

from Maintenance

(>90% recurring)

in €m

47%

Maintenance

31%

License

22%

Consulting

HIGH MARGIN & PREDICTABILITY

18 |

0.33* 0.37* 0.38*

0.43* 0.46 0.46 0.46

0.50

0.55

2007 2008 2009 2010 2011 2012 2013 2014 2015

DIVIDEND POLICY


FOCUS ON CONTINUITY

Ordered by fiscal year/in €

* According to the 1:3 stock split, rounded

19 |

SOFTWARE AG VALUE INVESTMENT KPI

39%

Mainte-

nance

34%

License

27%

Consulting

Growing share of product and recurring revenues

0.50€

0.55€

2014 2015

Dividend

increase

Free Cash Flow

conversion rate

around 120% of

Net profit.

50%

90%

130%

170%

2011 2012 2013 2014 2015

2.1% yield:

Operating margin* expansion

FY 2013 * Non–IFRS EBITA in % of revenue FY 2015

47%

Mainte-

nance

31%

License

22%

Consulting


Operating expenses

in €m 481.2 446.2 444.6

29.7%

26.8%

27.9%

2014 2015 2013

20 |

BUSINESS DEVELOPMENT AND OUTLOOK


REVENUE OUTLOOK 2016

2007 2013 2010 2015

Outlook 2016

A&N

DBP

A&N Revenue in €m DBP Revenue in €m

432 +5% to +10%

-4% to-8% 247

150

310

21 |

BUSINESS DEVELOPMENT AND OUTLOOK


MARGIN OUTLOOK

30-31%

29.7%

27.9%

32 – 35%

2020 target

26.8%

* EBITA non-IFRS adjusted for non-operating items

Operating Margin*

2016e 2015 2014 2013

22 |

Investor Relations

Uhlandstrasse 12

64297 Darmstadt

Germany

T: +49 (0) 6151 / 92 1900

F: +49 (0) 6151 / 9234 1900

W: softwareag.com

E: [email protected]

© 2016 Software AG. All rights reserved

mailto:[email protected]

Documents

DB ACCESS GERMAN, SWISS & AUSTRIAN CONFERENCE/media/Files/S/... · Portfolio management Enterprise architecture BUSINESS & IT TRANSFORMATION PROCESS IoT Mobile integration integration