Upload
hakhanh
View
235
Download
6
Embed Size (px)
Citation preview
©2014 Software AG. All rights reserved.
1 |
August 2014
Software AG
Investor Factbook
©2014 Software AG. All rights reserved.
2 |
Safe-Harbor-Statement
This presentation contains forward-looking statements based on beliefs
of Software AG management. Such statements reflect current views of
Software AG with respect to future events and results and are subject to risks
and uncertainties. Actual results may vary materially from those projected
here, due to factors including changes in general economic and business
conditions, changes in currency exchange, the introduction of competing
products, lack of market acceptance of new products, services or technologies
and changes in business strategy. Software AG does not intend or assume any
obligation to update these forward-looking statements.
©2014 Software AG. All rights reserved.
3 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 15
Product Offering & Use Cases / Customer References 23
Market Positioning & Competition 34
Key Financials 43
Shares & Ownership 68
Financials 2013/2014 52
©2014 Software AG. All rights reserved.
4 |
Key Investment Indicators
1. Footprint: Established global software player with blue chip customer base
2. USP: Unique technology leadership in fast growing IT segments
3. Financials: Strong balance sheet and cash generation
4. Assets: Experienced management team and loyal expert staff
5. Timing: Business model in transition / leverage ahead
©2014 Software AG. All rights reserved.
5 |
Software AG - At a Glance
High performance data management
Process planning, monitoring and
analysis
Middleware to integrate data, applications and
digital workflows
Intelligent Business Operations and In-
Memory Data Management
~ €1bn Revenue (FY 2013)
~ 27% Operating margin (Non-IFRS, FY 2013)
~ 16% Free cash flow margin (FY 2013)
> 4,500 Employees worldwide
~ 1,000 R&D
~ € 2bn Market cap
> 60% Free float
~ 38% Software AG Foundation and own shares
70 Countries
Global customer base: 80% of Fortune 10,000
Technology leader in system integration,
process automation and data management
©2014 Software AG. All rights reserved.
6 |
What we do - Overcome Digital Gaps
6
©2014 Software AG. All rights reserved.
7 | 7 |
APPS
SEARCH
ERP
CRM, HR
ADABAS ETC.
ESB / SOA-GOV.
DATA MGMT.
COLLABORATION
EVENT MGMT.
RULES
Process Automation
IntegrationMiddleware
Application Silos HW Infrastructure
Analytics Visualization
REAL-TIME DATA
In-Memory Big Data/IBO
Enabler of the Digital Enterprise
IT 1.0
IT 3.0
Internet 4.0
©2014 Software AG. All rights reserved.
8 |
Large Enterprise / Public Sector Customers in 70 Countries
Finance Public Sector Telecom Chemicals/Pharma Energy/Utilities
Manufacturing Logistics/ Transport
Healthcare/
Consumer Goods
©2014 Software AG. All rights reserved.
9 |
Based on product revenue group - FY 2013
Revenue Split – Well Balanced
Product Revenue by Region Product Revenue by Industry
Public Sector Financial Sector IT
Services Associations Manufacturing
Telcos Logistics Retail
Energy Other
22%
19%
48%
31%
12%
9%
EMEA
Germany Asia Pacific
Americas
©2014 Software AG. All rights reserved.
10 |
Enterprise Transaction Systems ETS
• Manage sustainable
cash flow
• Adjust cost to
maintain segment
margin > 60%
Business Process Excellence
• Technology leadership position in fast
growing markets
• Transform technology leadership into
market leadership
• >50% contribution to group result, mid-term
Business Lines & Development
BPE
IT PORTFOLIO
MANAGEMENT
REAL-TIME INTELLIGENCE AND BIG DATA
PROCESS AUTOMATION
AND INTEGRATION
COLLABORATIVE
PROCESS ANALYSIS
DATABASE MANAGEMENT
SYSTEMS
Consulting
APPLICATION DEVELOPMENT &
MODERNIZATION
ENABLER FOR OWN
PRODUCT SALES (BPE/ETS)
• Successful Turnaround
• Focus on Integration
and Business Solutions
• Margin expansion /
stable revenue
47% 31%
22%
S H A R E O F R E V E N U E *
*based on revenue 2013 ( € 897m): pro forma excl. SAP consulting
SAP CONSULTING
(DISPOSAL IN Q2 2014)
©2014 Software AG. All rights reserved.
11 |
0
20
40
60
80
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
BPE - New Customers and Bigger Deals increase License Volatility
€m
€m Four quarter rolling - steady growth
40
80
120
160
200
240
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
2008 2009 2010 2013 2011 2012
2008 2009 2010 2013 2011 2012
In the quarter - volatile
©2014 Software AG. All rights reserved.
12 |
0
50
100
150
200
250
300
350
400
2006 2007 2008 2009 2010 2011 2012 2013
Maintenance – High Level of Recurring Revenue and Profits
186 213
267
305
353 362 378
> 90% of Maintenance Revenue is recurring
€m
BPE
ETS
369*
*currency impact: € 16m
©2014 Software AG. All rights reserved.
13 |
Group Maintenance Revenue
€m
350
400
2013 2018
2 scenarios* for BPE
License growth
A: Flat
B: Market perform
• assumptions: BPE maintenance depending on license growth, varying with scenario;
ETS maintenance -7% CAGR
A B
©2014 Software AG. All rights reserved.
14 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 15
Product Offering & Use Cases / Customer References 27
Market Positioning & Competition 37
Key Financials 46
Shares & Ownership 69
Financials 2013/2014 54
©2014 Software AG. All rights reserved.
15 |
Software AG - Management
Karl-Heinz Streibich Arnd Zinnhardt Dr. Wolfram Jost
Corporate Communications, Global
Legal, Global Audit, Corporate
Office and Top Management
Development
Chief Executive Officer (CEO)
- since 2003 -
Finance, Controlling, Taxes,
Treasury, Mergers & Acquisitions,
Business Operations, Investor
Relations, Global Purchasing,
Human Resources
Chief Financial Officer (CFO)
- since 2002 -
Research & Development
Chief Technology Officer (CTO)
- since 2010 -
©2014 Software AG. All rights reserved.
16 |
Growth Strategy
G R O W T H B A S E D O N T H R E E P I L L A R S
…leveraging technology
leadership in enterprise
infrastructure software
O R G A N I C G R O W T H …
…addressing Mega Trends for
enterprise IT
I n n o v a t i o n / M & A
Pa r t n e r / C h a n n e l
• Integration
middleware
• Process analysis and
automation
• High performance
data management
• Cloud
• Big Data / Analytics
• Collaboration
…enable eco-system, incl.
attractive partner sales:
• SI’s
• Reseller
• OEM
• Cloud
©2014 Software AG. All rights reserved.
17 |
B I G D ATA a n d I N - M E M O RY D ATA M A N A G E M E N T
Software AG Agility Platform – Enabler of the Digital Enterprise
I N T E L L I G E N T B U S I N E S S O P E R AT I O N S
Event Processing Process Mining Historic KPI's Activity Monitoring Data Analytics
Business Process Analysis
PORTFOLIO MANAGEMENT
IT Portfolio Management Enterprise Architecture
COLLABORATIVE PROCESS ANALYSIS
Proactive Alerts Dashboards Real-Time Insight Mobile Anywhere
P R O C E S S A U TO M AT I O N / I N T E G R AT I O N
Application Integration B2B Integration SOA Governance Composite Applications
ERP Custom CRM
Process Automation
Governance, Risk & Compliance
System of Records
©2014 Software AG. All rights reserved.
18 |
Acquisitions Support Technology Leadership
Big Data and In-Memory Data Management
Intelligent Business Operations
Event Processing
Real-Time Dashboards
Process Automation / Integration
Collaborative Process Analysis
Portfolio Management
Event Processing
IT Portfolio Management
Visualization
Cloud Application Development
Messaging Mobile Suite
©2014 Software AG. All rights reserved.
19 |
Turning Technology Leadership into Market Leadership:
Build Multi Channel Ecosystem and Integrated Portfolio Suite
Aris/web-Methods
webMethods
Apama
JackBe
LongJump
Alfabet, ARIS
Business Process Platform
Integration Platform
TerracottaMychannels
Cloud Suite & on-premise
Big Data/IBO Platform
Growth Multiple
Sales
Channels
Single
Sales
Channel
SI‘s
OEM‘s/ISV‘s
Suite
Direct Sales +€50m S+M Investment
©2014 Software AG. All rights reserved.
20 |
Revenue and Margin Drivers mid term
2014 2015 2016 2017 2018
Impact new sales staff
Growing Ø deal size
Platforms / use case packaging
Recurring projects
Cloud based offerings
Partner sales / OEM
Revenue mix
Economies of scale
(R&D, G&A)
Metrics
Channel
sales
Sales
productivity
©2014 Software AG. All rights reserved.
21 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 15
Product Offering & Use Cases / Customer References 23
Market Positioning & Competition 34
Key Financials 43
Shares & Ownership 68
Financials 2013/2014 52
©2014 Software AG. All rights reserved.
22 |
Product Portfolio
PORTFOLIO
MANAGEMENT
IBO AND BIG DATA
PROCESS AUTOMATION AND INTEGRATION
ALFABET
IT Planning and
Portfolio
Management
ALFABET
Enterprise
Architecture
Management
WEBMETHODS
Integration
WEBMETHODS
Business Process
Management
APAMA
Intelligent
Business
Operations
TERRACOTTA
In-Memory Data
Management
Portfolios Live
COLLABORATIVE
PROCESS ANALYSIS
ARIS
Business Process
Analysis
ARIS
Governance,
Risk and
Compliance
Management
Process Live
ADABAS-NATURAL
Application Development
ADABAS-NATURAL
Application Modernization
ADABAS-NATURAL
Database Management System
AgileApps Live
Integration Live
©2014 Software AG. All rights reserved.
23 |
Software AG Cloud Offering
Pr o c e s s L i v e
Business Modeling
Process Publishing
Po r t f o l i o L i v e
IT Portfolio Management
A g i l e A p p s L i v e
Application Development Case Management
I n t e g r a t i o n L i v e
Cloud-to-Cloud Cloud-to-on premise
Unified PaaS
on premise SaaS
Private cloud
©2014 Software AG. All rights reserved.
24 |
The Impact of Differentiating Digital Business Solutions
Refreshments
Supply chain transformation in days
10s of millions increase in profit
higher response
rate to marketing
campaigns
reduction in
transfer time
for assets 98%
10x
several million
Average annual benefit of
now emergency-prepared
Employees and contractors
©2014 Software AG. All rights reserved.
25 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Financial Services
• Free up IT budget to directly support
‐ Aggressive international growth in the
private banking sector
‐ Higher cross-selling across divisions
• Avoided development projects: Credit
Suisse saves $6 million annually
• Eliminated software costs: the
organization is saving $5 million annually
Through IT Portfolio Management and Enterprise Architecture Management
Payback in
6 MONTHS
SEVERAL MILLION DOLLARS SAVED
R E S U LT:
©2014 Software AG. All rights reserved.
26 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Food and Beverage
• Automate maintenance & repair process
for 1.7M coolers
– Streamline asset management
– Real-time visibility of cooler location
and status
• Reduce time for asset transfer by 98%
(from up to 8 hours to below 10 minutes)
• Uncover trends and recurring issues
• Avoid lost equipment
Through the Software AG Suite
R E S U L T:
98%
from up to 8 hours to below 10 minutes
REDUCTION IN TRANSFER TIME FOR ASSETS
Refreshments
©2014 Software AG. All rights reserved.
27 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Financial Services
• Fraud detection
• Reduce fraud loss
• Improve speed and accuracy of fraud
detection system
• Increase rules in fraud detection
algorithm from 50 to over 1,000
• Drive profit up by tens of millions of
Euros
• Meet 650 millisecond end-to-end SLA 99%
of the time
• Achieve better accuracy
Through In-Memory Data Management
R E S U L T:
Fraud detection I N M I L L I S E C O N D S
DRIVES PROFIT UP
of millions €
BY 10s
©2014 Software AG. All rights reserved.
28 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Manufacturing
• Consumer-centric order-to-ship process • Provide end-to-end supply chain visibility
to retail through defined process monitoring points, KPIs, alerts and pre-configured dashboards
• Integrate Electrolux’s heterogeneous systems and partners
• New business model supported in days,
enabling Electrolux to win a new major
retail customer
• Real-time insight into processes, orders
and inventory
• Early indicator of potential problems
• Enables “management by exception”
• Reduced cycle times — products
delivered faster, fewer reschedules
Through Process Automation and Integration
R E S U L T:
Consumer Retail Distribution Manufacturer
Bulk order
New Retail
Customer Consumer order
Consumer order delivery
Full Supply Chain Visibility
Installation
Supply
Chain
©2014 Software AG. All rights reserved.
29 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Automotive
• New business model: also sell the
company’s engines to other car
manufacturers
• Increase production capacity by 500%
without compromising on quality
• Meet strict logistics and SLA requirements
of other car manufacturers
• Integrated B2B network with external
logistic partners
• A real time dashbording to monitor all
business processes
Through Process Automation and Integration
ENGINE PRODUCTION
R E S U L T:
INCREASE
CAPACITY from 10.000 to 50.000 per year
Italian Sports Car
Manufacturer
©2014 Software AG. All rights reserved.
30 |
O P P O R T U N I T Y :
R E S U L T S :
Transforming Telecommunications
• Customer retention through real-time
targeted marketing campaigns
• Increase customer loyalty by proactively
offering the right service at the right
time
• 10 times higher response rate to
marketing campaigns
• Marketing campaign cycle time cut from
days to minutes
• Increased customer satisfaction and
retention rates
• Leapfrogging competition through digital
innovation
Through Intelligent Business Operations
10x INCREASE IN OFFER UPTAKE
$15 million
in revenue
in year one
INCREASE
R E S U L T:
©2014 Software AG. All rights reserved.
31 |
O P P O R T U N I T Y :
R E S U L T S ( E x p e c t e d ) :
Transforming Telecommunications
• Company wide business transformation
program
• Focus on the customer and on cost
reductions
• Redesign all processes and supporting
applications
• Identify the 20% of the processes required
to fulfill customer needs and a way to
eliminate the rest
• Significant costs savings in the execution
chain
Through Collaborative Process Analysis
R E S U L T:
savings
Significant cost
FULFILL 80% of customer requirements
with 20% EFFORT
Global Top 5 Telco
©2014 Software AG. All rights reserved.
32 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 16
Product Offering & Use Cases / Customer References 27
Market Positioning & Competition 34
Key Financials 43
Shares & Ownership 68
Financials 2013/2014 52
©2014 Software AG. All rights reserved.
33 |
IBM 29%
Pegasystems 10%
Oracle 8%
Software AG 7%
OpenText 4%
Appian 3%
Tibco 3%
Others 36% IBM
29%
Oracle 23%
Microsoft 13%
Tibco 9%
Others 15%
Business Process Management Suite
(BPMS)
Enterprise Service Bus Suite
(ESB)
Source: Source: Gartner: Market Share, All Software Markets, Worldwide, 2013, Colleen Graham et al, 28 March 2014
Market Share in Main Markets: BPMS (Process Management)
and ESB (Integration)
Software AG
11%
©2014 Software AG. All rights reserved.
34 |
Software AG Suite is a Top-Ranked Leader
Application Integration Suites • • • • •
Application Services Governance • •
Business Process Analysis Tools • • •
Business Process Management Suites • • •
Enterprise Architecture Tools • •
Governance, Risk and Compliance • •
Integrated IT Portfolio Analysis Apps •
Complex Event Processing Platforms • • •
Comprehensive Integration Solutions • • • • •
EA Management Suites •
Elastic Caching Platforms • • •
ESB • • • •
Integrated SOA Governance • •
SOA Service Life-Cycle Management •
©2014 Software AG. All rights reserved.
35 |
Positioned in Leaders Quadrant of Gartner’s Magic Quadrant for
On-Premises Application Integration Suites
“Leaders in infrastructure that supports systematic
application integration provide a comprehensive
ESB suite offering as well as the ability to
integrate that offering with other relevant
technologies (including community management,
data integration, SOA and integration governance,
and BPM). This is combined with a strong
commitment to this market, which is expressed
through focused value propositions and go-to-
market strategies (for example, by packaging
platforms and/or by providing integrated product
and service offerings specific for this market).”
Source: Gartner, Inc., Magic Quadrant for On-Premises Application Integration Suites, Jess Thompson, et
al., June 27, 2013
This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated
in the context of the entire document. The Gartner document is available upon request from Software AG.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does
not advise technology users to select only those vendors with the highest ratings. Gartner research
publications consist of the opinions of Gartner's research organization and should not be construed as
statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research,
including any warranties of merchantability or fitness for a particular purpose.
©2014 Software AG. All rights reserved.
36 |
Forrester Wave™: Platform-As-A-Service, ISV Scenario, Q2 ’11; May
2011 “The Forrester Wave™: Platform-As-A-Service For Vendor
Strategy Professionals, Q2 2011”
LongJump – Cloud Experience
• Cloud: Deployment of solutions on the
public or private cloud, on-premise or
within hybrid environments
• Deployment to any mobile device is
supported with utmost ease, since
applications are automatically mobile-
ready
©2014 Software AG. All rights reserved.
37 |
Software AG (Apama) Ranked as a Leader in the CEP Market
Software AG purchased Apama
from Progress Software in July
2013
“Apama earned high marks for
its event processing features,
its development tools, and its
business end-user tools,
propelling it into its position
as a Leader.”
Source: The Forrester Wave™: Complex Event Processing (CEP) Platforms, Q3 2009, Forrester
Research, Inc., August 4, 2009
The Forrester Wave is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave
are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical representation
of Forrester's call on a market and is plotted using a detailed spreadsheet with exposed
scores, weightings, and comments. Forrester does not endorse any vendor, product, or
service depicted in the Forrester Wave. Information is based on best available resources.
Opinions reflect judgment at the time and are subject to change.
©2014 Software AG. All rights reserved.
38 |
Best of 2 Worlds - Big Data and AIM merge to IBO
slow fast
AIM Big
Data
Apama
Terracotta
Nirvana
BPM
ESB
SOA
IBO
modern traditional
©2014 Software AG. All rights reserved.
39 |
Intelligent Business Operations – Driving growth of AIM Market
Modern
ESB
SOA, B2B
& other
Modern
BPMS
Addressable AIM
Market Segments= $7.1bn
Addressable AIM
Market Segments = $9.2bn
1.1bn
1.6bn
1.2bn
2.1bn
SOA, B2B
& other
2014 2017 Tradit.
ESB Tradit.
BPMS 1.5bn
1.7bn 2.1bn
1.3bn
3.0bn
0.6bn
Modern
ESB
Modern
BPMS
Tradit.
BPMS
Tradit.
ESB
IBO related segments 2.9bn
5.1bn
21% CAGR
9% CAGR
©2014 Software AG. All rights reserved.
40 | December 9, 2011 40
Market Potential - Intelligent Business Operations
Source: Wikibon (Big Data Application (Analytic & Transactional) Revenue Forecast, in $bn, 2014 – 2017 Δ 113%)
Gartner (estimate for IBO: customer use case oriented solution)
3.5
5.3
6.5
7.4
0
1
2
3
4
5
6
7
8
2014 2015 2016 2017
Wikibon
Gartner
$bn
©2014 Software AG. All rights reserved.
41 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 16
Product Offering & Use Cases / Customer References 27
Market Positioning & Competition 37
Key Financials 43
Shares & Ownership 69
Financials 2013/2014 54
©2014 Software AG. All rights reserved.
42 |
Financial Data - Key Figures
in €m, IFRS 2013 2012 2011 2010 2009 2008 2007
Total Revenue 972.7 1,047.3 1,098.3 1,119.5 847.4 720.6 621.3
- License 330.1 318.9 295.2 327.4 269.9 272.0 241.3
- Maintenance 375.6 393.3 378.7 369.4 310.6 267.1 212.9
- Consulting
& Other 267.0 335.1 424.4 422.7 266.9 181.5 167.1
BL BPE 422.9 385.5 339.6 321.5 247.2 210.7 149.9
BL ETS 274.5 310.5 313.9 355.4 328.5 332.1 310.2
BL Consulting 275.4 351.3 444.8 441.4 271.3 177.8 161.1
- BPE/ETS 199.7 n.a. n.a. n.a. n.a. 177.8 161.1
- IDS/SAP 75.7 n.a. n.a. n.a. n.a. n.a. n.a.
EBIT 205.5 248.3 269.2 268.6 218.2 180.5 136.8
Net income 134.0 164.7 177.2 175.6 140.8 115.9 88.4
Dividend (€m, total) 36.3* 38.2 39.9 37.0 32.6 31.5 28.5
Free cashflow 159.1 170.7 187.7 217.8 188.4 133.4 82.2
Net debt (-)
(/cash(+) -106.9** +49.7 -60.9 -167.2 -271.8 -70.3 -133.0
Shareholders‘
equity 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5
Employees (FTE) 5,238 5,419 5,535 5,644 6,013 3,526 3,479
* Dividend payment based on 78,859,844 dividend entitled shares (0,46€/share)
** including € 56.5 Mio. Securities
©2014 Software AG. All rights reserved.
43 |
1. Net operating profit after tax = op. PbT ./. tax rate x (op. PbT + goodwill)
2. Return on equity: Operating EBIT / Equity
3. Return on cap. employed: Operating EBIT / (Fixed assets + Working capital)
4. Current assets ./. Cash and Cash Equivalents ./. Current liabilities
FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007
EBITDA margin 26.6% 28.6% 28.7% 28.1% 30.3% 28.6% 25.7%
Operating Margin (Non-IFRS) 26.8% 28.5% n.a. n.a. n.a. n.a. n.a.
Amortization/ Depreciation
5.5% 4.9% 4.2% 4.1% 4.6% 3.5% 2.4%
Operating EBIT margin 21.1% 23.7% 24.5% 24.0% 25.8% 25.1% 23.3%
NOPAT1 margin 13.8% 15.7% 16.1% 15.7% 16.6% 16.1% 15.1%
ROE2 21.3% 23.4% 28.3% 34.9% 33.7% 32.9% 31.8%
ROCE3 14.6% 18.2% 20.5% 27.4% 20.9% 26.2% 22.5%
Net Working Capital in €m4 -€213.5m -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0
Working Capital5 24.3% 26.2% 17.5% -8.2% 0.8% 3.2% 4.2%
Free Cash Flow margin6 16.4% 16.3% 17.1% 19.5% 22.2% 18.5% 13.2%
Corporate tax rate 32.0% 31.2% 31.7% 31.0% 32.7% 34.0% 35.4%
WACC7 5.12% 5.1% 5.7% 6.8% 5.5% 6.8% 8.4%
Equity ratio 48.4% 59.8% 56.6% 48.1% 39.1% 51.8% 47.2%
DSO (Days Sales Outstanding) 107 105 93 100 109 120 119
Capex €m €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8
Capital Employed8 €m €1,346.3 €1,313.0 €1,262.0 €929.6 €1,002.2 €669.9 €655.2
5. Current assets ./. Current liabilities / Total revenue
6. (Operating Cash flow ./. Capex) / Revenue
7. Pro forma, not applied for corporate management
8. Fixed assets + Working capital
Key Financial Ratios (IFRS; in % of revenue)
©2014 Software AG. All rights reserved.
44 |
BPE Investments lead to higher S&M spendings
BPE S&M costs
ETS S&M costs
0%
10%
20%
30%
40%
50%
60%
20082009
20102011
20122013
23.0% 21.6%
20.7% 21.3% 20.9%
18.4%
44.9% 42.2%
39.2% 37.1% 39.1%
47.6%
©2014 Software AG. All rights reserved.
45 |
R&D drives Leverage of acquired Technology
BPE R&D expenses (costs + IPR amortization)
BPE R&D costs
ETS R&D costs
0%
5%
10%
15%
20%
25%
30%
20082009
20102011
20122013
9.0% 9.0%
8.9% 8.4%
8.4% 9.2%
22.2% 21.6%
18.7% 18.1% 19.5% 19.5%
25.8% 25.8% 24.2% 24.3% 25.8% 25.6%
©2014 Software AG. All rights reserved.
46 |
-127.7
-107
49.6
-60.9
-137.3
-271.8
-70.3
-133
182.9
-300 -200 -100 0 100 200 300
H1 2014
2013
2012
2011
2010
2009
2008
2007
2006
Solid Business & Cash Flow generate Growth Opportunities
Net Cash Net Debt
n/a
0.88
0.34
1.06
0.53
0.19
n/a
0.41
n/a
Net debt/EBITDA
€ 480m
$ 560m
5 tech acquisitions €113m
©2014 Software AG. All rights reserved.
47 |
Loan-Liquidity Structure (30 June 2014, €m)
Financing
0 100 200 300 400 500
Liquidity
Loans
309
437
Promissory notes
Bank loan & other
European Investment Bank
due 2015-17 2018/20
Net debt: 128
125
in €m
298
Liquidity:
Cash (€ 254m) and
Securities (€ 55m)
©2014 Software AG. All rights reserved.
48 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 16
Product Offering & Use Cases / Customer References 27
Market Positioning & Competition 37
Key Financials 46
Financials 2013/2014 52
Shares & Ownership 68
©2014 Software AG. All rights reserved.
49 |
Euro 41%
US Dollar 22%
Other 9%
BRL 5%
ILS 5%
ZAR 3%
AUD 4%
CAD 4%
GBP 7%
(in €m; yoy)
Q2
2014
Q2
in %
YTD
2014
YTD
in %
Licenses -0.5 -1% -4.2 -4%
Maintenance -3.9 -4% -8.8 -5%
Consulting &
Other -1.0 -2% -2.1 -2%
Total -5.4 -3% -15.1 -4%
Currency impact on revenue
Currency impact on revenue
Q2 2014 / YTD 2014 (6 months)
41% revenue in Euro
59% revenue in foreign currency
Currency split YTD 2014
©2014 Software AG. All rights reserved.
50 |
Segment report Q2 2014 / YTD 2014 (6 months)
Business Process Excellence (BPE)
(in €m) Q2
2014
Q2
2013
Δ% Δ% acc
YTD
2014
YTD
2013
Δ% Δ% acc
Licenses 32.7 42.8 -24% -22% 76.5 84.7 -10% -6%
Maintenance 51.9 48.6 7% 11% 103.3 97.1 6% 11%
Total revenue 84.6 91.4 -7% -5% 179.8 181.8 -1% 3%
Cost of sales -5.5 -4.9 12% 15% -11.1 -10.8 3% 8%
Gross profit 79.1 86.5 -9% -6% 168.7 171.0 -1% 3%
Sales & marketing -45.4 -48.1 -6% -2% -94.5 -94.1 - 4%
R & D -20.4 -19.8 3% 4% -41.4 -39.5 5% 6%
Segment result 13.3 18.6 -28% -27% 32.8 37.4 -12% -5%
©2014 Software AG. All rights reserved.
51 |
Segment report Q2 2014 / YTD 2014 (6 months)
Enterprise Transaction Systems (ETS)
(in €m) Q2
2014
Q2
2013
Δ% Δ% acc
YTD
2014
YTD
2013
Δ% Δ% acc
Licenses 17.4 32.6 -47% -47% 30.7 53.6 -43% -40%
Maintenance 38.3 43.1 -11% -6% 76.0 86.3 -12% -7%
Product revenue 55.7 75.7 -26% -24% 106.7 139.9 -24% -20%
Other 0.2 0.1 100% 4% 0.3 0.4 -25% -4%
Total revenue 55.9 75.8 -26% -24% 107.0 140.3 -24% -20%
Cost of sales -2.9 -3.1 -6% -6% -6.2 -6.9 -10% -6%
Gross profit 53.0 72.7 -27% -25% 100.8 133.4 -24% -20%
Sales & marketing -8.8 -13.5 -35% -32% -17.9 -27.3 -34% -32%
R&D -6.3 -6.4 -2% -2% -12.5 -12.9 -3% -3%
Segment result 37.9 52.8 -28% -25% 70.4 93.2 -24% -19%
©2014 Software AG. All rights reserved.
52 |
Segment report Q2 2014 / YTD 2014 (6 months)
Consulting
(in €m) Q2
2014
Q2
2013 Δ% Δ%
acc
YTD
2014
YTD
2013 Δ% Δ%
acc
BPE/ETS services 47.2 50.4 -6% -4% 95.9 99.5 -4% -1%
SAP product revenue 1.0 2.1 -52% -53% 2.1 4.5 -53% -52%
SAP services 7.3 18.0 -59% -59% 20.0 36.6 -45% -45%
Total revenue 55.5 70.5 -21% -20% 118.0 140.6 -16% -15%
Cost of sales -48.1 -59.2 -19% -18% -100.0 -119.4 -16% -15%
Gross profit 7.4 11.3 -35% -32% 18.0 21.2 -15% -13%
Sales & marketing -5.9 -8.6 -31% -29% -13.2 -18.2 -27% -26%
Segment result 1.5 2.7 -44% -42% 4.8 3.0 60% 62%
©2014 Software AG. All rights reserved.
53 |
Revenue YTD 2014 (6 months)
(in €m) YTD
2014
YTD
2013
Δ% Δ%
acc
Product 288.7 326.2 -11% -8%
Licenses 107.3 139.4 -23% -20%
Maintenance 181.4 186.8 -3% 2%
Consulting & services 115.9 135.8 -15% -13%
Other 0.3 0.7 -57% -46%
Total 404.9 462.7 -12% -9%
©2014 Software AG. All rights reserved.
54 |
44
Results Q2 2014 / YTD 2014 (6 months)
(in €m) Q2
2014
Q2
2013 Δ%
YTD
2014
YTD
2013 Δ%
Total revenue 196.0 237.7 -18% 404.9 462.7 -12%
Cost of sales -62.9 -73.5 -14% -130.9 -149.4 -12%
Gross profit 133.1 164.2 -19% 274.0 313.3 -13%
Margin in % 67.9% 69.1% 67.7% 67.7%
R & D -26.6 -26.2 2% -53.8 -52.4 3%
Sales & marketing -64.2 -73.9 -13% -133.6 -146.8 -9%
Administration -15.9 -17.4 -9% -35.0 -35.2 -1%
Other income/expense -1.4 -2.3 -39% 3.9 7.1 -45%
EBIT 25.0 44.4 -44% 55.5 86.0 -35%
Margin in % 12.8% 18.7% 13.7% 18.6%
©2014 Software AG. All rights reserved.
55 |
Operating Result (Non-IFRS) 1H 2014
1H 2014 1H 2013 ∆% ∆% acc
Total Revenue 404.9 462.7 -13% -9%
- License 107.3 139.4 -13% -9%
- Maintenance 181.4 186.3 -3% 2%
Gross Profit 274 313.3 -12%
OPEX 222.4 234.4 -5%
EBIT (before all taxes) 55.5 86.0 -35%
Amortization 21.5 19.5
Adj. EBITA (Non-IFRS) 88.1 110.7
Margin in % of revenue 21.8% 23.9%
NOPAT 56.1 73.4 -14%
Margin in % of revenue 13.9% 15.9%
EPS* 0.71 0.87 -18%
* Weighted average shares outstanding (basic): 6m 2014: 79.5m / 6m 2013: 84.8m
©2014 Software AG. All rights reserved.
56 |
Non-IFRS Earnings Q2 2014 / YTD 2014 (6 months)
(in €m) Q2
2014
Q2
2013
YTD
2014
YTD
2013
EBIT (before all taxes) 25.0 44.4 55.5 86.0
Amortization on acquisition related
intangible assets 10.4 10.1 21.5 19.5
Reduction acquisition related product
revenue by purchase price allocation 0.2 - 0.5 -
Other impacts from M&A activities 1.6 1.2 -1.1 1.3
Share based payment 1.2 -0.7 2.7 -1.3
Restructuring/severances 4.0 3.7 6.3 5.2
Result from sold operations 2.7 - 2.7 -
EBITA (Non-IFRS) 45.1 58.7 88.1 110.7
margin in % of revenue (Non-IFRS) 23.0% 24.7% 21.8% 23.9%
NOPAT (Net income Non-IFRS) 28.5 38.9 56.1 73.4
EPS (Non-IFRS)* 0.36 0.46 0.71 0.87
* Weighted average shares outstanding (basic) Q2 2014: 78.9m / Q2 2013: 83.8m // 6m 2014: 79.5m / 6m 2013: 84.8m
©2014 Software AG. All rights reserved.
57 |
Cash flow Q2 2014 / YTD 2014 (6 months)
(in €m) Q2
2014
Q2
2013
Δ% YTD
2014
YTD
2013
Δ%
Operating cash flow 22.4 13.3 68% 72.5 78.7 -8%
./. CapEx* -3.9 -3.7 -6.2 -6.4
Free cash flow 18.5 9.6 93% 66.3 72.3 -8%
as % of revenue 9.5% 4.0% 16.4 15.6%
Free cash flow per share** 0.23€ 0.11€ 109% 0.83€ 0.85€ -2%
* Cash flow from investing activities except acquisitions and except investments in debt instruments
** Weighted average shares outstanding (basic) Q2 2014: 78.9m / Q2 2013: 83.8m / 6m 2014: 79.5m / 6m 2013: 84.8m
©2014 Software AG. All rights reserved.
58 |
June 30,
2014
June 30,
2014
1,730.7 1,730.7
309.2
254.6
84.9
1,082.0
436.9
245.4
139.3
909.1
Cash and cash
equivalents/
Securities
Trade receivables
Inventory, other assets
Fixed assets
(goodwill 825.6/829.2)
Total
Financial liabilities
Other liabilities
Deferred income
Shareholders’ equity
(ratio 52.5%/48.4%)
Total
Assets Liabilities
Balance sheet (in €m)
Dec. 31,
2013
Dec. 31,
2013
1,996.9
613.4
309.9
108.0
965.6
1,996.9
506.5
323.2
57.3
1,109.9
©2014 Software AG. All rights reserved.
59 |
Outlook FY 2014 - UPDATE
Product Revenue BPE
Product Revenue ETS 273.8
422.9
26.8%
FY 2013 (in €m)
26% to 28%
-9% to -16%*
Previous Year’s Level
Outlook FY 2014 (as of July 15, 2014)
Operating Margin
(EBITA, Non-IFRS)**
* Revenue growth or decline at constant currency
** Before adjustments for non-operating items (see non-IFRS earnings results)
H1 2014 ( ∆ yoy)
+3%*
-20%*
21.8%
©2014 Software AG. All rights reserved.
60 |
Earnings Q2 2014 / YTD 2014 (6 months)
* Weighted average shares outstanding (basic) Q2 2014: 78.9m / Q2 2013: 83.8m / 6m 2014: 79.5m / 6m 2013: 84.8m
(in €m) Q2
2014
Q2
2013
Δ% YTD
2014
YTD
2013
Δ%
EBIT (before all taxes) 25.0 44.4 -44% 55.5 86.0 -35%
Financial result -2.6 -1.5 73% -5.5 -2.8 96%
Profit before taxes 22.4 42.9 -48% 50.0 83.2 -40%
Other taxes -2.4 -1.4 71% -4.0 -3.2 25%
Income taxes -5.8 -12.7 -54% -13.3 -24.0 -45%
Tax rate in % 36.6% 32.9% 34.6% 32.7%
Net Income 14.2 28.8 -51% 32.7 56.0 -42%
EPS in €* 0.18€ 0.34€ -47% 0.41€ 0.66€ -38%
©2014 Software AG. All rights reserved.
61 |
Earnings Q2 2014 / YTD 2014 (6 months)
(in €m) Q2
2014
Q2
2013
Δ% YTD
2014
YTD
2013
Δ%
Net Income 14.2 28.8 -51% 32.7 56.0 -42%
Income taxes 5.8 12.7 -54% 13.3 24.0 -45%
Other taxes 2.4 1.4 71% 4.0 3.2 25%
Financial result 2.6 1.5 73% 5.5 2.8 96%
EBIT (before all taxes) 25.0 44.4 -44% 55.5 86.0 -35%
Margin in % 12.8% 18.7% 13.7% 18.6%
Amortization 10.5 10.0 5% 21.5 19.4 11%
EBITA 35.5 54.4 -35% 77.0 105.4 -27%
Margin in % 18.1% 22.9% 19.0% 22.8%
Depreciation 3.0 3.5 -17% 5.9 6.8 -13%
EBITDA 38.5 57.9 -34% 82.9 112.2 -26%
Margin in % 19.6% 24.4% 20.5% 24.2%
©2014 Software AG. All rights reserved.
62 |
Amortization / depreciation impact 2014ff
(preliminary)
Q2
2014
GJ
2014
GJ
2015ff*
* Estimated
Amortization IDS
(in €m)
Amortization other
Depreciation
2.6
7.8
3.0
10.5
28.9
11.9
7.7
24.0
12.0
©2014 Software AG. All rights reserved.
63 |
Headcount by functional areas* and geography
(in FTE) June 30,
2014
Dec.31,
2013
Δ% qoq
June 30,
2013
Δ% yoy
Total 4,606 5,238 -12% 5 5,375 -14%
Consulting & services 1,906 2,347 -19% 2,484 -23%
R & D 977 998 -2% 941 4%
Sales & marketing 1,059 1,180 -10% 1,229 -14%
Administration 664 713 -7% 721 -8%
USA 718 778 -8% 769 -7%
Germany 1,251 1,711 -27% 1,777 -30%
Rest of world 2,637 2,749 -4% 2,829 -7%
* According to P+L structure
©2014 Software AG. All rights reserved.
64 |
Revenue 2013
excl. IDS Consulting* (pro forma)
(in Mio. €) Q1 Q2
Q3 Q4 FY
Product 154.6 167.1 173.2 201.7 696.6
Licenses 63.0 75.4 79.5 109.6 327.5
Maintenance 91.6 91.7 93.7 92.1 369.1
Consulting & services 49.0 50.3 47.4 53.0 199.7
Other 0.3 0.3 0.2 0.2 1.0
Total 203.9 217.7 220.8 254.9 897.3
* IDS Consulting (SAP-products and services); business unit was sold in May 2014
©2014 Software AG. All rights reserved.
65 |
Executive Summary 4
1
3
4
5
6
2
Agenda
7
Company Strategy 16
Product Offering & Use Cases / Customer References 27
Market Positioning & Competition 37
Key Financials 46
Shares & Ownership 68
Financials 2013/2014 52
©2014 Software AG. All rights reserved.
66 |
*Source: ThomsonOne, July 2014
Number of total shares: 86,943,945
Freefloat: ~ 62%
Indices: TecDAX, DAX 100, TechAllShare
Codes: SOW, SOW GR, SOWG.DE
ISIN: DE0003304002
ADR U.S. trading symbol: STWRY
Share Data
Major Institutional Investors
Solid Shareholder Structure
Shareholder Structure
Institutional Investors by Region*
Software AG Foundation
Institutional Investors
Private & undisclosed
26% 29%
36% Own Shares**
**as of July 2014
Fidelity (FMR LLC) 3.5%
Alken Asset Management LLP 3.0%
Templeton 3.0%
Deutsche Asset & Wealth 3.0%
Deka Investment 2.9%
Norges Bank 2.9%
34%
24% 14%
13%
5% Germany
United States
United Kingdom
Scandinavia
France
Rest of World
5%
BeNeLux
5%
9%
©2014 Software AG. All rights reserved.
67 |
The Software AG Foundation is one of Germany’s ten largest foundations
(capital stock € 1.1 bn (Dec. 31, 2012), Software AG shares and other assets)
Founded by Dr. hc. Peter M. Schnell in 1992
Disburses financial support amounting to approx. € 30 million annually
Under the principle of a “self-help grant”, the Foundation supports nonprofit
organizations not only with financial support but also with consulting services in
promoting project sustainability and further developments
The Foundation finances many different projects in areas including:
• science and research
• support for the elderly and disabled
• care and support for children and young people
• education and training
• the environment
Software AG Foundation – Anchor Shareholder
©2014 Software AG. All rights reserved.
68 |
Dividend policy reflects profit, cash flow and financing requirements for growth
Cash out ratio: 20-25% of average FCF/net profit
Continuous Dividend
0.25 0.27 0.30
0.33 0.37 0.38
0.43 0.46 0.46 0.46
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Ordered by fiscal year/in €
©2014 Software AG. All rights reserved.
69 |
Baader Bank
Barclays Capital
Berenberg Bank
Bryan Garnier
Commerzbank
Credit Suisse
Deutsche Bank
DZ Bank
Independent Res.
JPM/Cazenove
Kepler
LBBW
Goldman Sachs
Hauck & Aufhäuser
HSBC
MainFirst
Metzler
Mirabaud
Morgan Stanley
Natixis
Société Générale
UBS
Warburg Research
Analyst Coverage
Banks / Broker who cover Software AG on a regular base
For latest consensus of analysts‘ financial estimates visit our
IR website on: www.softwareag.com
©2014 Software AG. All rights reserved.
70 |
Financial Calendar Q3 2014
October 29 Financial figures Q3 2014
September 23 Baader Investment Conference
Investor Relations
Munich, Germany
September 9 Commerzbank Sector Conference Week
CFO Arnd Zinnhardt
Frankfurt, Germany
September 8-9 UBS Best of Germany
one-on-one Conference
Jay Johnson, CEO of Software AG North America
Investor Relations
New York, USA
©2014 Software AG. All rights reserved.
Follow us on Twitter:
@SoftwareAG_IR
Investor Relations
Uhlandstrasse 12
64297 Darmstadt
Germany
phone: +49 (0) 6151 / 92 1900
fax: +49 (0) 6151 / 9234 1900
softwareag.com
e-mail: [email protected]