INVESTOR RELATIONS FACTBOOK
December 2018
© 2018 Software AG. All rights reserved.
2 |
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 techno-
logies 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.
© 2018 Software AG. All rights reserved.
SAFE-HARBOR-STATEMENT
1 |
A DAY IN THE LIFE OF SOFTWARE AG
06.15
© 2018 Software AG. All rights reserved.
2 |
A DAY IN THE LIFE OF SOFTWARE AG
06.59
© 2018 Software AG. All rights reserved.
3 |
A DAY IN THE LIFE OF SOFTWARE AG
07.45
© 2018 Software AG. All rights reserved.
4 |
A DAY IN THE LIFE OF SOFTWARE AG
10.00
© 2018 Software AG. All rights reserved.
5 |
A DAY IN THE LIFE OF SOFTWARE AG
11.15
© 2018 Software AG. All rights reserved.
6 |
A DAY IN THE LIFE OF SOFTWARE AG
13.00
© 2018 Software AG. All rights reserved.
7 |
A DAY IN THE LIFE OF SOFTWARE AG
17.00
© 2018 Software AG. All rights reserved.
8 |
A DAY IN THE LIFE OF SOFTWARE AG
17.30
© 2018 Software AG. All rights reserved.
9 |
A DAY IN THE LIFE OF SOFTWARE AG
18.00
© 2018 Software AG. All rights reserved.
3 |
SOFTWARE AG AT A GLANCE
© 2018 Software AG. All rights reserved.
Technology leader for almost 50 years in data management
and application development platforms
~ €3bn MARKETCAP
~ 66% Free Float
€870+ MILLION
IN REVENUE
50%+ recurring
75% product revenue
4,500+ EMPLOYEES**
R&D 26%
S&M 19%
Consulting
&Services
42%
Admin
13%
BY REGION*
* Based on FY 2017 **P&L as of December 31, 2017
43%
Americas
49%
EMEA
REVENUE
52%
DBP
25%
A&N
23%
Services
BY BUSINESS LINES*
4 |
Adabas & Natural
(Heritage)
• Application Development
• Data Management
System
• Modernization (e.g. ZiiP)
• System Support 2050+
BUSINESS LINES
© 2018 Software AG. All rights reserved.
*Group revenue split FY 2017
Share of
Revenue* 52%
Digital Business
Platform (Core)
• Integration &
Automation
• Real-time Analytics
& Decisions
• In-Memory Data
• Business & IT
Transformation
Share of
Revenue*
Consulting Services
(Professional Services)
• IT Strategy & Design
• Product Implementation &
Customized Solutions
• Education & Cloud
Services
• Global Delivery (on-
/offshore)
Share of
Revenue* 25% 23%
Cloud & IoT
(Extension)
• IoT solutions
• Industry 4.0/IIoT
Platform Device
Management
• Edge Computing
• Cloud-based
software
5 |
Revenue in €m:
DBP Product revenue
A&N Product revenue
PROFITABLE GROWTH
© 2018 Software AG. All rights reserved.
STRATEGY EXECUTION
2006 2017
284 224
455
Adabas & Natural
Extending Lifecycle
69
31.8%
24.7%
2012
EBITDA
EBITA, non-IFRS
Operating margin
2019
Project Helix Strategy Refresh
6 |
INFLECTION POINTS
© 2018 Software AG. All rights reserved.
WHEN DIGITAL BUSINESS PLATFORM TAKES THE LEAD
0%
20%
40%
60%
80%
100%
2010
License Revenue
0%
20%
40%
60%
80%
100% Maintenance Revenue
2012
0%
20%
40%
60%
80%
100% Business Segment Result
Adabas & Natural
Digital Business Platform
2018e
7 |
INDEX
© 2018 Software AG. All rights reserved.
Key Investment Indicators 1. 8
Business Model, Characteristics & GTM 2. 22
Markets, Positioning & Competition 3. 27
Digital Business Platform – Core Capabilities 4. 32
Customers References & Use Cases 6. 54
Financials 7. 61
Shares & Ownership 8. 81
IoT Platform – Offering and Core Capabilities 5. 36
8 |
1. KEY INVESTMENT INDICATORS
© 2018 Software AG. All rights reserved.
9 |
KEY INVESTMENT INDICATORS
© 2018 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built for almost 50 years
• Risk-balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories according to industry analysts
• Innovator: First Digital Business Platform
• Vendor independency allows system integration of large brands’ products
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• ½ of revenue is recurring (maintenance & SaaS)
• High operating margin (2017: 31.8%)
• Continuous return to shareholders (Dividend + SBB ≙ ¾ of free cash flow on average)
10 |
Telecom Chemicals/Pharma Energy/Utilities
Public Sector Logistic/Transport Consumer/Retail
BLUE CHIP CUSTOMER BASE
© 2018 Software AG. All rights reserved.
BUILT FOR ALMOST 50 YEARS (SAMPLES)
Chemicals/Pharma IoT Finance
Manufacturing
11 |
20%
19%
18% 12%
10%
Government Financial Services
IT Services Manufacturing
Services Telco & Media
Transport & Logistics Other
BALANCED RISK
© 2018 Software AG. All rights reserved.
REVENUE BY GEOGRAPHY AND INDUSTRY
Product Revenue by Region* Product Revenue by Industry*
43%
49%
8%
Americas
EMEA (14% Germany)
Asia Pacific
*Based on Group product revenue – FY 2017
12 |
EXPERIENCED MANAGEMENT TEAM
© 2018 Software AG. All rights reserved.
AND LOYAL EXPERT STAFF
Dr. Wolfram Jost
Chief Technology Officer
– since 2010 –
M&A Technical Market
Screening & Due Diligence;
Global SE Community;
Product Marketing &
Management; Industry
Analyst Relations; Co-Head
of Global Portfolio Innovation
Steering Team; Strategic
Customer Projects; Stand-
Alone Business Acquisitions
Sanjay Brahmawar Chief Executive Officer
– since 2018 –
Global Human Resources;
Global Legal; Global
Information Services (IT);
Processes, Audits,
Quality; Corporate Office;
Corporate PR; Marketing:
Corporate, Field, Digital;
Environmental, Social and
Governance (ESG)
Dr. Stefan Sigg Chief R&D Officer
– since 2017 –
Co-Head of Global Portfolio
Innovation Steering Team;
R&D Product Lines;
R&D Quality Assurance;
Architecture Team; GUI
Team; Co-Innovation
Customer Projects; Global
Support; Research
Arnd Zinnhardt Chief Financial Officer
– since 2002 –
Global Finance and
Controlling; Corporate
Investor Relations;
Treasury; Global
Purchasing; Mergers &
Acquisitions; Global
Taxes; Business
Operations
John Schweitzer Chief Customer Officer
– since 2018 –
Global Services, Sales
Regions; Global Alliance
& Channel; Global A&N
2050; Global Business
Operations: Industries,
Inside Sales; Sales
Operations; Sales
Enablement/Customer
Engagement
13 |
KEY INVESTMENT INDICATORS
© 2018 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built for almost 50 years
• Risk-balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories according to industry analysts
• Innovator: First Digital Business Platform
• Vendor independency allows system integration of large brands’ products
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• ½ of revenue is recurring (maintenance & SaaS)
• High operating margin (2017: 31.8%)
• Continuous return to shareholders (dividend + SBB ≙ ¾ of free cash flow on average)
14 |
• Enterprise Architecture Tools,
October 2018
• Full Life Cycle API Management,
April 2018
• Integrated IT Portfolio Analysis Applications,
November 2017
• Enterprise Architecture Tools, May 2017
• The Forrester WaveTM: API Management
Solutions, Q4 2018
• The Forrester WaveTM: Streaming Analytics,
Q3 2017
• The Forrester WaveTM: Digital Process
Automation, Q3 2017
• The Forrester WaveTM: Strategic Portfolio
Management, Q3 2017
• The Forrester WaveTM: Enterprise Architecture
Management, Q2 2017
• The Forrester WaveTM: Hybrid Integration For
Enterprises, Q4 2016,
TECHNOLOGY LEADERSHIP
© 2018 Software AG. All rights reserved.
SOFTWARE AG IS A LEADER IN 9 MARKETS
Gartner is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and
internationally, and is used herein with permission. All rights reserved.
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 or other designations. Gartner
research publications consist of the opinions of Gartner’s research organization and should not e 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.
All statements in this report attributable to Gartner represent Software AG interpretation of data, research opinion
or viewpoints published as part of a syndicated subscription service by Gartner, Inc., and have not been reviewed
by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the date of this
Presentation/Factbook). The opinions expressed in Gartner publications are not representations of fact, and are
subject to change without notice.
MAGIC QUADRANTS
For further information please follow the link.
15 | © 2018 Software AG. All rights reserved.
WORLD’S
1st
High-performance
transactional database
ADABAS &
NATURAL
THE FIRST
B2B server and
SOA integration
platform
WEBMETHODS
THE FIRST
Business process
analysis and
design platform
ARIS
THE FIRST
Big data & streaming
analytics platform
TERRACOTTA
APAMA
THE FIRST
True IoT
cloud platform
CUMULOCITY IoT
THE FIRST
INNOVATOR FOR COMPETITIVE DIFFERENTIATION
16 |
We will not lock
customers into
proprietary systems.
We make all leading
databases and application
platforms work in synergy
with one another.
NEUTRAL BECAUSE WE ARE
© 2018 Software AG. All rights reserved.
VENDOR INDEPENDENT
Our solutions work in
harmony with the existing
IT landscape.
17 |
KEY INVESTMENT INDICATORS
© 2018 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built for almost 50 years
• Risk balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories according to industry analysts
• Innovator: First Digital Business Platform
• Vendor independency allows system integration of large brands’ products
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• ½ of revenue is recurring (maintenance & SaaS)
• High operating margin (2017: 31.8%)
• Continuous return to shareholders (Dividend + SBB ≙ ¾ of free cash flow on average)
18 |
LICENSE REVENUE: ⅔ FROM GROWING IT MARKETS
© 2018 Software AG. All rights reserved.
0%
20%
40%
60%
80%
100%
2006 2008 2010 2012 2014 2016 2017
A&N
DBP
DBP offering focused on IT digitization segments, like IoT, streaming analytics etc.
19 |
RECURRING REVENUE
© 2018 Software AG. All rights reserved.
0
100
200
300
400
2010 2011 2012 2013 2014 2015 2016 2017
A&N
DBP
353 362 378 369 369
407 in €m
48%
maintenance
>90% recurring
412 429
MAINTENANCE & SAAS
Maintenance
& SaaS
63% of
Product
Revenue is
recurring
New KPI for DBP
Annual Recurring Revenue (as of Sept. 30, 2018)
DBP 209€m +11% yoy, acc.
thereof Cloud & IoT 27€m +111% yoy, acc.
20 |
200
300
400
500
600
2017 2019 2021 2023 2025
*renewal rate ca. 93-95%
400
500
600
700
800
2017 2019 2021 2023 2025
© 2018 Software AG. All rights reserved.
A) +10% CAGR
B) flat
€m
€m
€m
MAINTENANCE REVENUE SHOWS COMPOUND GROWTH
DBP maintenance:
Renewal rate: 93% (2018), 94% (2019-2021), 95% (2022-2025)
Net new maintenance ≙ 18% of license p.y.
Stable churn rate: - 4% CAGR
(regardless of license revenue)
DBP license growth:
A
A
B
B
Model assumptions:
A&N maintenance:
21 |
31.2% 29.7%
26.8%
27.9%
SOFTWARE AG
© 2018 Software AG. All rights reserved.
INVESTMENT KPI
44%
mainte-
nance
32%
license
24%
consulting
Growing share of product and recurring revenues
€0.55
€0.65
2015 2017
Dividend increase
Free cash flow
conversion rate
>100% of
net profit.
20%
60%
100%
140%
180%
Operating margin*
FY 2014 * non-IFRS EBITA in % of revenue FY 2017
49%
mainte-
nance &
SaaS
28%
license
23%
consulting
30 – 32%
(2018 target)
Cash-out ratio:
25 – 33%
31.8%
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
22 | © 2018 Software AG. All rights reserved.
2. BUSINESS MODEL, CHARACTERISTICS & GTM
23 |
0%
10%
20%
30%
40%
50%
Q1 Q2 Q3 Q4
License Maintenance Services
BUSINESS MODEL
© 2018 Software AG. All rights reserved.
REVENUE STRUCTURE & LICENSE VOLATILITY License:
• Direct sales, partners and ecosystems
• Traditional: Perpetual or term license
• New: subscription and pay per use
• Pricing based on Capacity (HW:CPU, Devices; SW: Data Volume)
Maintenance + SaaS:
• Recurring Revenue (renewal rate >90%)
• Maintenance pricing based on license:
• DBP: up to 22% (new); (≤20% installed)
• A&N: 15% (mainframe); 20% (other)
Consulting Services:
• Implementing own products (focus)
• Cost-plus or fixed-price projects
• Own staff + freelance and partners
Ø quarterly share of respective
FY revenue 2014 – 2017
24 |
ACQUISITIONS SUPPORT TECHNOLOGY LEADERSHIP
Integration and BPM Business Process
Analysis Big Data (In-Memory)
2007 2008 2009 2010 2011 2012 2013
Application PaaS
2016
© 2018 Software AG. All rights reserved.
*A&N Portfolio (all other DBP)
Internet of
Things
2017
Artificial
Intelligence
* *
Streaming
Analytics
2018
25 |
OUR PARTNER ECOSYSTEM A FORCE MULTIPLIER FOR SUCCESS
Selection of Strategic Global Alliance Partners
Increase value:
• Increasing implementation success rate by extended partner service capabilities
• Reducing time-to-value through broad industry and vertical footprint
• Accelerating innovation & solutions to provide systems of differentiation
• Providing effective sales and service delivery due to local coverage
• Managing successfully the transformation into a true DIGITAL business
© 2018 Software AG. All rights reserved.
26 |
Capabilities Benefits
ADABAS Data Management System
• Data management for high-performance
transaction processing
• Multi-platform availability
• Faster and more reliable data processing
• Easy data share with other systems
• Data management on platform of choice
NATURAL Application Development
• Platform for developing and operating
enterprise applications
• Eclipse™-based tool environment
• Cross-platform deployment
• Rapid delivery of applications
• Faster meeting of business demands
• Business logic retention independent of
platform decision
ADABAS & NATURAL Application Modernization
• Improving end-user experience and
interoperability of applications
• Leveraging new technologies—the Web,
mobile, SOA or big data
• Retaining investments without risk
• Increasing end-user productivity
• Accelerating innovation
ADABAS & NATURAL
© 2018 Software AG. All rights reserved.
TRANSACTION PROCESSING
27 | © 2018 Software AG. All rights reserved.
3. MARKETS, POSITIONING & COMPETITION
28 |
DIGITIZATION WEDGE SEPARATES
© 2018 Software AG. All rights reserved.
DIGITAL DISRUPTION Digital Disruption
Internet of Things
Smart Business
Connected Customers
CUSTOMERS FROM ESTABLISHED COMPANIES
Retail Pharma Insurance Mobility … any industry! Manufacturing
29 | © 2018 Software AG. All rights reserved.
Retail
Consumer
centric
supply
chains
Platform
as a
retailer
PROCESS
INNOVATION
Pharma
Personalized
medicine
Health card
as a
medical
service
platform
PRODUCT
INNOVATION
Individualized
production
Smart
products (I 4.0, MES, IoT)
Predictive
solutions
ORGANIZATIONAL
INNOVATION
Insurance
Platform as
a broker
Personalized
insurance
contract
SERVICE
INNOVATION
Mobility
Connected
cars
Platform
as a
broker
MOBILITY
INNOVATION
… any industry!
DIGITAL
INNOVATION!
Manufacturing
DISRUPT YOURSELF … IF NOT, OTHERS WILL OUTSTANDING CUSTOMER EXPERIENCE ENABLED BY DIGITAL PLATFORMS
30 |
Co-innovation through customers & vendors Innovation only through vendor
CHANGING THE GAME
Product Based
Application n
Application 2
Application 1
(Use case 1)
Microservices • Agile • Flexible/fast
Platform Based
Digital Business Logic (Innovation Layer)
DIGITAL PLATFORM
Use case 1 Use case 2 Use case n
Monolithic • Complex • Inflexible/slow
Digital Application 1 Digital Application 2 Digital Application n
PLATFORM VERSUS PRODUCT BASED INNOVATIONS
© 2018 Software AG. All rights reserved.
PRE-DIGITAL WORLD DIGITAL WORLD
31 |
SIMPLIFY & ACCELERATE
© 2018 Software AG. All rights reserved.
YOUR JOURNEY TO BECOMING A DIGITAL BUSINESS
Front office • Agile
• Innovative
• Dynamic
• Differentiating
Customer engagement systems
Core operational systems (ERP, SCM, …)
Finance & Controlling
Order Management
Customer Management
Procurement Supply Chain Management
Digital Business Applications Agility, Speed, Innovation, Differentiation
Sales Service Support
DIGITAL BUSINESS PLATFORM
Marketing
Sales
Back office • Stable
• Reliable
• Efficient
• Standardized
32 | © 2018 Software AG. All rights reserved.
4. DIGITAL BUSINESS PLATFORM – CORE CAPABILITIES
33 |
Core ERP (SOR) Legacy BI Things
PaaS SaaS
THE NEW DIGITAL IT ARCHITECTURE BIMODAL AND INTEGRATION-CENTRIC
DIGITAL BUSINESS PLATFORM (PaaS Suite)
Systems of Differentiation (Digital Applications)
Big Data Partners Mobile Apps
© 2018 Software AG. All rights reserved.
+ HYBRID
CLOUD
ON PREMISES
EDGE
34 |
DIGITAL BUSINESS PLATFORM
© 2018 Software AG. All rights reserved.
BUILDING BLOCKS
DIG
ITA
L B
US
INE
SS
PL
AT
FO
RM
BUSINESS & IT
TRANSFORMATION
powered by
ARIS & ALFABET
DEVICES powered by
CUMULOCITY
DATA &
ANALYTICS
powered by
APAMA & TERRACOTTA
PROCESS &
APPLICATIONS
powered by
WEBMETHODS
INTEGRATION &
API
powered by
WEBMETHODS
Dynamic Process
Automation
Low-Code
Applications
Hybrid
Integration
Process Transformation
& Management
Governance, Risk
& Compliance
Portfolio
Management
Enterprise Architecture
Management
Streaming Analytics &
Machine Learning
In-Memory Data &
Messaging
API
Management
Device
Connectivity
Device
Management
+ HYBRID
CLOUD
ON PREMISES
EDGE
© 2018 Software AG. All rights reserved.
35 |
DIG
ITA
L B
US
INE
SS
PL
AT
FO
RM
DIGITAL BUSINESS PLATFORM
© 2018 Software AG. All rights reserved.
PLATFORM CAPABILITIES
BUSINESS & IT
TRANSFORMATION
PROCESS &
APPLICATIONS
DEVICES
Business Strategy
& Planning
Customer
Journeys
Design &
Analysis
Enterprise
Architecture
Portfolio
Management
Governance, Risk
& Compliance
Process
Mining
Low-Code
App Development
Mobile
Enablement
Task & Work
Management
Rules
Management
Content
Management
Dynamic
Orchestration
Process
Automation
Case
Management
Robotic Process
Automation
INTEGRATION &
API
DATA &
ANALYTICS
API
Gateway & Portal
API Lifecycle
Management Microservices
Master Data
Management
Managed
File Transfer
Application & Cloud
Integration
IoT & Big Data
Integration
B2B
Integration
Mainframe & Data
Integration
In-Memory
Store & Compute
Distributed
Caching Messaging
Event Routing &
Persistence
Alerts &
Actions
Streaming
Analytics
Machine
Learning
Edge
Analytics
Data Preparation
& Visualization
Device
Agents
Device
Connectivity
Device Lifecycle
Management
Connection
Management
Digital
Twin
Device
Operations
Cloud
Remote Access
Edge
Services
Device
Security
36 | © 2018 Software AG. All rights reserved.
5. IOT PLATFORM – OFFERING AND CORE CAPABILITIES
37 |
Technology
leadership
Neutrality
Home base in highly
industrialized
Germany
Mid-size company
culture
© 2018 Software AG. All rights reserved.
G2M model of direct
customer ownership
Heritage of being a
software platform
company
IOT @ SOFTWARE AG USP AND SUCCESS FACTORS
38 |
HYBRID INTEGRATION
© 2018 Software AG. All rights reserved.
DRIVING “PERVASIVE” CONNECTIVITY
Hybrid
Integration
“Things”
Mobile Apps
Social Networks On-Premises
Applications and Data Sources
Business
Process
Networks
Business
Partners
Subsidiaries
SaaS/Cloud
Services
EDW Mart
MDM
39 |
SOFTWARE AG ACQUIRES BUILT.IO FLOW™ IPAAS TO EXTEND LEADERSHIP IN HYBRID INTEGRATION
Flow iPaaS
Connect any app, service, or
device to automate workflows
Flow Embed
Embedded connectivity into any
SaaS application
• Brings modern Node.js
technology, FaaS and
160+ new connectors
• Integrating Built.io Flow with Software
AG´s leading iPaaS, IoT, API and B2B
capabilities uniquely delivers an
unmatched integration offering
• Software AG gains
analyst recognized
iPaaS offering
© 2018 Software AG. All rights reserved. © 2018 Software AG. All rights reserved.
40 |
COMPONENTS OF AN END-TO-END IOT SOLUTION
© 2018 Software AG. All rights reserved.
Business challenges
• Create IoT solutions for smarter products and higher-value services
• Deliver value of IoT solutions quickly: start small & scale in iterations
• Balance risk & innovation: leverage new technologies, but stay open and flexible
• Benefit from best practice, IoT methodology and proven tools
IoT Edge Platform IoT Endpoints
ERP
CRM
SaaS
IoT Cloud Platform Enterprise Applications
Gateway
Long-range
Communication
Integration Local
Communication Edge
Server
41 |
CUMULOCITY IOT - A NEW IOT PLATFORM
© 2018 Software AG. All rights reserved.
COMBINING THE POWER OF CUMULOCITY WITH THE DIGITAL BUSINESS PLATFORM
42 |
IoT Framework
Scale Out (Enterprise Level)
• Cross divisional end-to-end
company processes
• Coding, professional developers
• Existing and new IoT applications
fully interwoven
Growing Maturity Level over Time
Fle
xib
ilit
y &
So
ph
isti
cati
on
DIFFERENT USER LEVELS FOR DIFFERENT CUSTOMER NEEDS
IoT SaaS
Fast Entry
• Self-service, out-of-the-box
• Pre-defined solution accelerators
IoT PaaS
Fan Out (Departmental)
• High productivity, fast go-to-market
• Smart rules
• Focus on business users
© 2018 Software AG. All rights reserved. © 2018 Software AG. All rights reserved.
43 |
USE OF MACHINE LEARNING
… operationalizes these models to
enable organizations to respond
intelligently.
© 2018 Software AG. All rights reserved.
… uses machine learning to allow
organizations build models that
represent patterns of behavior.
Predictive Analytics Streaming Analytics
44 |
SOFTWARE AG IOT PLATFORM SERVICES
© 2018 Software AG. All rights reserved.
Digital Business Platform Container
IoT
Analytics Device
Integration
Enterprise &
Cloud
Integration
IoT Integration
IoT Modeling &
Portfolio Mgmt
IoT Development
45 |
• Follows a common
technology vision
• Is already integrated in
Digital Business Platform
• Enables smarter
applications across all
industry verticals
• Important capability for IoT
use cases
• Key customer wins
• Strong telco experience
(Nokia spin-off)
• Development of IoT
platform since 2010
• Integration
• Visualization and templates
• Real-time Analytics
• Device Management
• Connectivity:
Multi protocol / machine
languages (300+ industrial
protocols)
SOFTWARE AG MAIN ACQUISITIONS FOR IOT
© 2018 Software AG. All rights reserved.
EXTENDS OUR TECHNOLOGY LEADERSHIP
AI, machine learning &
predictive analytics
IoT PaaS –
End-to-End Cloud Platform
• Intuitive web-based self-
service analytics platform
for rapid fire visualization
• Enables domain experts to
analyze time series data in
real-time
Time-Series Analysis
46 |
47 |
ADAMOS.COM
OUR PROMISE
© 2018 Software AG. All rights reserved.
Global Alliance DMG MORI, Dürr, Software AG,
ZEISS, ENGEL and ASM PT
combine forces in ADAMOS for
Industry 4.0 and are open to
additional partners.
End-to-End With ADAMOS, companies can offer
their customers, partners and suppliers
a comprehensive digitization strategy.
Broad App Portfolio The ADAMOS App Factory Alliance
concentrates the partners’ technological
expertise and industry knowledge for the
quick, collaborative development of
apps.
Digital Marketplaces Partners represent their digital expertise
through their individual identities and
market-places for their customers (e.g.
CELOS powered by ADAMOS).
Open Platform The ADAMOS IIoT platform is
manufacturer-neutral and combines
“leading-edge” IIoT technology and
industry knowledge.
Strong Set-Up ADAMOS GmbH and the ADAMOS App
Factory Alliance has launched on October
1, 2017, with approx. 200 experts, five
digital marketplaces and more than 30
apps.
1
4
2
3
5 6
48 |
49 |
ADAMOS.COM
ADAMOS TOTAL VIEW
APP FACTORY
ALLIANCE
PARTNER
ECO SYSTEMS
ADAMOS
JV
… App App
APP MARKET PLACE
APP
INNOVATION &
CERTIFICATION
COUNCIL
App App App
App App App App
ADAMOS
IoT SUITE
GOVERNANCE (Standards, Interfaces, …)
App App App App App App App
NEW
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
NEW
App App
NEW
© 2018 Software AG. All rights reserved.
50 |
ADAMOS.COM
ADAMOS JV (ADAMOS GMBH)
ADAMOS
JV
PARTNER
ECO SYSTEMS
… App App
APP MARKET PLACE
APP INNOVATION
& CERTIFICATION
COUNCIL
App App App
App App App App
ADAMOS
IoT SUITE
App App App App App App App
NEW
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
NEW
App App
ADAMOS
JV
APP MARKET PLACE
ADAMOS
IoT SUITE
App App App App App App App
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
ADAMOS
JV APP MARKET PLACE
ADAMOS
IoT SUITE
App App App App App App App
General
Management
• ADAMOS JV is responsible for the
provision of state-of-the-art software
and solutions, independent of
specific software vendors (no lock-in)
• ADAMOS JV is a IaaS/PaaS
operation unit with no direct access
to customers, but responsible for
partner management
• Shareholders of ADAMOS will be
the founders and further leading
mechanical engineering companies
at equal share (Premium Partner,
max 10)
• Additional Partners (none-
shareholders) are users of the
ADAMOS platform with minimum
commitment
Supervisory
Board
Technology
Council
Pricing
Committee
© 2018 Software AG. All rights reserved.
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
51 |
ADAMOS.COM
ADAMOS APP FACTORY ALLIANCE
APP FACTORY
ALLIANCE
… App App
APP MARKET PLACE
App
App App App App
ADAMOS
IoT SUITE
GOVERNANCE (Standards, Interfaces, …)
App App App App App App App
NEW
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
APP FACTORY
ALLIANCE
GOVERNANCE (Standards, Interfaces, …)
The App Factory Alliance is a strategic cooperation of the
partners’ software divisions
Each App Factory develops primarily apps for its eco-system
owner and has also direct access to customers.
Core activities within the App Factory Alliance:
app development best practices
common standards and procedures
common app certification rules and processes
common market place for shared apps (op. by ADAMOS)
common I4.0 solutions cross partners for customers
Benefits for members are:
1. App development network
2. Large variety of applications
3. Cost efficiency: shared innovation & development
4. Reselling: own applications to other partners
5. Time-to-market: joint roadmaps, re-usability and sharing.
App App App
NEW
NEW
© 2018 Software AG. All rights reserved.
APP
INNOVATION &
CERTIFICATION
COUNCIL
52 |
ADAMOS.COM
ADAMOS MARKETPLACES (ECO SYSTEMS)
ADAMOS
JV APP MARKET PLACE
APP INNOVATION
& CERTIFICATION
COUNCIL
App App App
ADAMOS
IoT SUITE
App App App App App App App
NEW
• Eco systems provide apps for the
the digital market places, which are
built in the App Factory Alliance
• Each partner keeps their own digital
innovation identity to the market
• Digital market places are operated
on the ADAMOS IoT Platform
• Partners can use a market place
blue-print to get started faster
• Market places are cloud based and
have a pricing model „pay per use „
for risk sharing
• Small partners without an own
market place can use the ADAMOS
market place
PARTNER
ECO SYSTEMS
… App App App App App App
NEW
App App
© 2018 Software AG. All rights reserved.
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
53 |
54 | © 2018 Software AG. All rights reserved.
6. CUSTOMER REFERENCES & USE CASES
55 |
Increase operational
efficiency
Optimize use of
assets
Augment reliability
of equipment Improve product
quality
Efficiency & Optimization
Offer higher-value
services with new
revenue models
Implement “Assets as
a service” instead of
owned assets
Enhance customer
experience & new
engagements
Stay
competitive
New Business Models
© 2018 Software AG. All rights reserved.
SOFTWARE AG: EXAMPLE CUSTOMERS & USE CASES
56 |
APPLIED REAL-TIME INTELLIGENCE
© 2018 Software AG. All rights reserved.
AIR-SUPPLY MONITORING OF PAINT SYSTEMS
• Real-time signals from
paint shop robots
• Anomaly detection score
(IO / NIO)
• Detect anomalies in real-
time at the edge
(Industry PC)
• Closed-loop analytics
(real-time execution and
re-training of machine
learning models)
57 |
NORDEX: WIND FARM MANAGEMENT
Situation
• Installed wind power capacity of more than 21 GW in over 25 markets,
generating sales of EUR 3.4 billion in 2016 with 5,000 employees.
• Wind turbine manufacturing plants in Germany, Spain, Brazil, the United
States and India.
Business Needs
• Autonomous wind farm management of the critical operations at both
farm and individual turbine level based on data from numerous sensors.
• Data reduction: analyze and aggregate data onsite independent from the
cloud
• Wind turbine and farm management to be performed with the same
software architecture from edge to cloud with identical APIs, data models
and analytics.
Solution (Roll-Out)
• Cumulocity IoT Edge (200 wind turbines)
• Cumulocity IoT Cloud (Hybrid)
• Cloud Fieldbus
© 2018 Software AG. All rights reserved.
58 |
WIND TURBINES FEED ANALYTICS NEEDED FOR PREDICTIVE MAINTENANCE
© 2018 Software AG. All rights reserved © 2018 Software AG. All rights reserved.
59 |
> 2000* Data parameter combinations
~ 400k Crashes analyzed
10 mio. customers worldwide
Miles of driving data
© 2018 Software AG. All rights reserved.
380 bn.
World’s leading insurance
telematics provider (today: 40% market share)
Global car insurance market outlook
1bn+ cars worldwide on the road
TAM: ~ $650bn insurance contract volume
(Octo’s market share today: ~ $35bn)
Other services
Crash & claims
*vehicle, weather, traffic, socio-demographics …
Current statistics / figures Risk analytics
VEHICLE DATA TELEMATICS PLATFORM NEW DISRUPTIVE BUSINESS MODEL
60 |
BOSCH IOT CLOUD (BIC)
© 2018 Software AG. All rights reserved.
STRATEGIC CO-INNOVATION OVERVIEW
Bosch – a long-standing Software AG customer
Current co-innovation areas
for IoT & IIoT:
Use of Software AG products
within Bosch IoT Cloud (BIC)
End user tooling for Streaming
Analytics use cases
Predictive Analytics integration
Joint development of BIC services,
e.g. on “Location Awareness”
with Bosch Software Innovations Strategic
partner
61 | © 2018 Software AG. All rights reserved.
7. FINANCIALS
62 |
* EPS basic, 2007 – 2010 pro-forma, adjusted for share split (2011)
in €m, IFRS 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
Total Revenue 879.0 871.8 873.1 857.8 972.7 1,047.3 1,098.3 1,119.5 847.4 720.6 621.3
BL DBP 455.4 441.4 431.5 394.5 422.9 385.5 339.6 321.5 247.2 210.7 149.9
BL A&N 223.7 234.6 248.0 245.3 274.5 310.5 313.9 355.4 328.5 332.1 310.2
BL Consulting 199.9 195.8 193.6 218.0 275.4 351.3 444.8 441.4 271.3 177.8 161.1
Group License 256.7 263.0 271.9 270.1 330.1 318.9 295.2 327.4 269.9 272.0 241.3
Group Maintenance 421.6 412.2 406.9 371.3 375.6 393.3 378.7 369.4 310.6 267.1 212.9
EBIT 222.8 213.9 209.4 176.0 205.5 248.3 269.2 268.6 218.2 180.5 136.8
EBITA (non-IFRS) 279.5 272.0 259.1 239.3 260.7 298.9 n/a n/a n/a n/a n/a
EPS (in €, non-IFRS)* 2.38 2.37 2.22 1.96 2.07 2.31 n/a n/a n/a n/a n/a
Dividend cash out 44.3 41.9 39.5 39.5 36.3 38.2 39.9 37.0 32.6 31.5 28.5
Free cash flow 161.9 187.0 170.0 132.7 159.1 170.7 187.7 217.8 188.4 133.4 82.2
Net cash / Net debt 55.2 73.1 -25.7 -15.1 -50.4 49.7 -60.9 -167.2 -271.8 -70.3 -133.0
Shareholders‘ equity 1,118.3 1,196.8 1,089.8 1,013.4 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5
Employees (FTE) 4,596 4,471 4,337 4,421 5,238 5,419 5,535 5,644 6,013 3,526 3,479
FINANCIAL DATA
© 2018 Software AG. All rights reserved.
KEY FIGURES
63 |
1. Return on equity: Operating EBIT / Equity
2. Return on cap. employed: Operating EBIT / (Fixed assets + Working capital)
3. Current assets ./. Cash and Cash Equivalents ./. Current liabilities
4. Current assets ./. Current liabilities / Total revenue
5. (Operating Cash flow ./. Capex) / Revenue.
IFRS unless stated different
FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008
FY 2007
Operating margin (EBITA, non-IFRS)
31.8 31.2 29.7 27.9 26.8 28.5 n.a. n.a. n.a. n.a. n.a.
EBITDA margin 30.0 29.1 29.7 26.4 26.6 28.6 28.7 28.1 30.3 28.6 25.7
EBIT margin 25.3 24.5 24.0 20.5 21.1 23.7 24.5 24.0 25.8 25.1 23.3
ROE1 19.9 17.9 19.2 17.4 21.3 23.4 28.3 34.9 33.7 32.9 31.8
ROCE2 18.0 15.2 16.1 12.6 14.6 18.2 20.5 27.4 20.9 26.2 22.5
Net Working Capital (€m)3 -€298.1 -€200.2 -€155.9 -€98.1 -€213.5 -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0
Working Capital ratio4 7.7 20.0 16.6 25.7 24.3 26.2 17.5 -8.2 0.8 3.2 4.2
Free Cash Flow margin5 18.4 21.4 19.5 15.5 16.4 16.3 17.1 19.5 22.2 18.5 13.2
Corporate tax rate 37.3 33.0 32.4 33.7 32.0 31.2 31.7 31.0 32.7 34.0 35.4
WACC6 4.95 4.05 4.13 4.35 5.12 5.1 5.7 6.8 5.5 6.8 8.4
Equity ratio 58.6 61.2 60.1 54.8 48.4 59.8 56.6 48.1 39.1 51.8 47.2
DSO (Days Sales Outstanding) 103 113 111 115 107 105 93 100 109 120 119
Capex (€m) €27.5 €16.7 €15.5 €10.5 €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8
Capital Employed7 (€m) €1,248.4 €1,381.9 €1,282.8 €1,326.0 €1,346.3 €1,313.0 €1,262.0 €929.6 €1,002.2 €669.9 €655.2
KEY FINANCIAL RATIOS
© 2018 Software AG. All rights reserved.
IN % OF REVENUE
6. Pro forma, not applied for corporate management
7. Fixed assets + Working capital
64 |
DBP Total Revenue
Adabas & Natural
Operating Margin Group
(EBITA non-IFRS)2)
OUTLOOK
© 2018 Software AG. All rights reserved.
FULL YEAR 2018
1) At constant currency rates 2) Adjusted for non-operating items (see non-IFRS earnings results) 3) Weighted average shares outstanding (basic/IAS 33.19) FY 2017: 74.6m / FY 2018: 74.0m; based on new US-Federal-Tax and Euro/US-Dollar exchange rate of 1/1.18
- IoT / Cloud
- DBP excl. IoT / Cloud
EPS non-IFRS3)
FY 2018 Outlook (as of April 13, 2018)1)
30% to 32%
-6% to -2%
N/A
FY 2017 (in €m)
223.7
456.4
31.8%
14.9 +100% to +135%
+3% to +7% 441.5
+5% to +15% €2.38
65 |
KEY REVENUE METRICS FY
© 2018 Software AG. All rights reserved.
441.4
234.6
455.4
223.7
0
100
200
300
400
500
DBP Revenue A&N Revenue
FY 2016
FY 2017
€m
31.20% 31.80%
0%
10%
20%
30%
EBITA (non-IFRS) in % of Group Revenue
66 |
CURRENCY IMPACT ON REVENUE
© 2018 Software AG. All rights reserved.
Q3 2018 / YTD 2018 (9 MONTHS)
Euro 35%
US Dollar 30%
Other 14%
ILS 4%
BRL 4%
AUD 4%
GBP 6%
(in €m; yoy)
Q3
2018
Q3
in %
YTD
2018
YTD
in %
Licenses -0.8 -1% -6.0 -4%
Maintenance -1.9 -2% -16.7 -5%
SaaS 0 - -0.4 -3%
Consulting & Other -0.4 -1% -4.0 -3%
Total -3.2 -2% -27.1 -4%
Currency impact on revenue
35% revenue in Euro
65% revenue in foreign currency
Currency split YTD 2018
CAD 3%
67 |
REVENUE Q3 2018 / YTD 2018 (9 MONTHS)
© 2018 Software AG. All rights reserved.
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
Product revenue 165.9 149.9 11% 13% 465.8 460.1 1% 6%
Licenses 56.7 44.5 28% 29% 144.4 136.7 6% 10%
Maintenance 104.7 103.0 2% 3% 308.8 316.9 -3% 3%
SaaS / Usage based 4.5 2.4 88% 89% 12.6 6.5 95% 101%
Services 42.7 47.2 -10% -9% 134.8 149.9 -10% -7%
Other 0.2 0.2 - - 0.5 0.6 - -
Total 208.8 197.3 6% 7% 601.2 610.6 -2% 3%
68 |
DIGITAL BUSINESS PLATFORM (INCLUDING DBP CLOUD & IoT)
SEGMENT REPORT Q3 2018 / YTD 2018 (9 MONTHS)
© 2018 Software AG. All rights reserved.
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
DBP (excl. Cloud & IoT) 104.7 97.5 7% 8% 296.0 301.3 -2% 3%
- thereof Licenses 37.1 32.5 14% 15% 96.2 102.4 -6% -2%
- thereof Maintenance 67.7 64.9 4% 5% 199.8 198.9 0% 5%
DBP Cloud & IoT 9.1 3.7 144% 144% 20.7 10.2 104% 108%
Total revenue 113.8 101.2 12% 13% 316.7 311.5 2% 6%
Cost of sales -8.5 -7.8 9% 9% -26.2 -22.1 18% 22%
Gross profit 105.3 93.5 13% 14% 290.5 289.4 0% 5%
Sales & Marketing -42.9 -38.0 13% 14% -123.7 -124.7 -1% 3%
Research & Development -24.2 -22.6 8% 8% -71.1 -71.2 0% 3%
Segment result 38.2 32.9 16% 18% 95.7 93.5 2% 9%
Margin in % 33.6% 32.5% 30.2% 30.0%
Annual Recurring Revenue as of September 30
290.3 264.5 10% 11%
69 |
DBP CLOUD & IoT SEGMENT REPORT Q3 2018 / YTD 2018 (9 MONTHS)
© 2018 Software AG. All rights reserved.
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
Licenses 3.6 0.7 429% 429% 5.6 2.0 177% 179%
Maintenance 1.0 0.7 53% 53% 2.6 1.7 52% 54%
SaaS / Usage based
4.5 2.4 88% 89% 12.6 6.5 95% 101%
Total revenue 9.1 3.7 144% 144% 20.7 10.2 104% 108%
Annual Recurring Revenue as of September 30
27.0 12.8 111% 111%
70 |
ADABAS & NATURAL
© 2018 Software AG. All rights reserved.
SEGMENT REPORT Q3 2018 / YTD 2018 (9 MONTHS)
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
Licenses 16.1 11.3 43% 48% 42.7 32.3 32% 38%
Maintenance 36.0 37.4 -4% 0% 106.5 116.4 -8% -2%
Product revenue 52.1 48.7 7% 11% 149.1 148.7 0% 6%
Other 0.2 0.2 - - 0.5 0.5 - -
Total revenue 52.3 48.9 7% 11% 149.6 149.2 0% 6%
Cost of sales -1.9 -2.6 -23% -22% -4.6 -7.4 -37% -33%
Gross profit 50.4 46.3 9% 13% 145.0 141.8 2% 8%
Sales & Marketing -8.7 -7.3 19% 23% -23.1 -23.4 -1% 4%
Research & Development -5.9 -5.6 5% 2% -17.4 -17.6 -1% -2%
Segment result 35.8 33.4 7% 12% 104.5 100.8 4% 11%
Margin in % 68.4% 68.3% 69.8% 67.6%
71 |
CONSULTING
© 2018 Software AG. All rights reserved.
SEGMENT REPORT Q3 2018 / YTD 2018 (9 MONTHS)
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
Total revenue 42.7 47.2 -10% -9% 134.8 150.0 -10% -7%
Cost of sales -33.3 -35.6 -6% -6% -106.8 -115.9 -8% -5%
Gross profit 9.4 11.6 -19% -17% 28.0 34.0 -18% -15%
Sales & Marketing -4.0 -4.4 -8% -7% -12.7 -14.2 -11% -8%
Segment result 5.4 7.2 -26% -24% 15.3 19.8 -22% -20%
Margin in % 12.5% 15.3% 11.4% 13.2%
72 |
RESULTS
© 2018 Software AG. All rights reserved.
Q3 2018 / YTD 2018 (9 MONTHS)
(in €m) Q3
2018
Q3
2017
∆% ∆%
acc
YTD
2018
YTD
2017
∆% ∆%
acc
Total revenue 208.8 197.3 6% 7% 601.2 610.6 -2% 3%
Cost of sales -45.8 -48.7 -6% -5% -143.7 -155.3 -7% -5%
Gross profit 163.0 148.6 10% 12% 457.4 455.3 0% 6%
Margin in % 78.0% 75.3% 76.1% 74.6%
Research & Development -30.2 -28.2 7% 7% -88.5 -88.8 0% 2%
Sales & Marketing -58.9 -53.6 10% 11% -169.4 -175.3 -3% 1%
Administration -19.2 -17.0 13% 14% -54.2 -55.0 -1% 1%
Other income / expense -0.2 0.6 - - 3.5 3.8 - -
EBIT 54.5 50.4 8% - 148.8 140.0 6% -
Margin in % 26.1% 25.5% 24.7% 22.9%
73 |
EARNINGS
© 2018 Software AG. All rights reserved.
Q3 2018 / YTD 2018 (9 MONTHS)
* Weighted average shares outstanding (basic) Q3 2018: 74.0m/ Q3 2017: 74.0m | YTD 2018: 74.0m / YTD 2017: 74.9m
(in €m) Q3
2018
Q3
2017 ∆%
YTD
2018
YTD
2017
∆%
EBIT (before all taxes) 54.5 50.4 8% 148.8 140.0 6%
Financial result 1.4 -0.3 - 3.4 -0.3 -
Profit before taxes 55.8 50.1 12% 152.2 139.7 9%
Other taxes -1.6 -1.6 0% -4.8 -5.3 -10%
Income taxes -16.1 -14.7 10% -43.5 -42.0 4%
Tax rate in % 31.7% 32.5% -31.7% 33.9%
Net income 38.1 33.8 13% 103.9 92.4 12%
EPS in €* €0.51 €0.46 13% €1.40 €1.23 14%
74 |
NON-IFRS EARNINGS
© 2018 Software AG. All rights reserved.
Q3 2018 / YTD 2018 (9 MONTHS)
* Weighted average shares outstanding (basic) Q3 2018: 74.0m / Q3 2017: 74.0m | YTD 2018: 74.0m / YTD 2017: 74.9m
(in €m) Q3
2018
Q3
2017 ∆%
YTD
2018
YTD
2017 ∆%
EBIT (before all taxes) 54.5 50.4 8% 148.8 140.0 6%
Amortization on acquisition related intangible assets 5.5 6.7 -19% 16.0 23.0 -31%
Share based payments 2.9 5.9 -51% 8.9 14.6 -39%
Restructuring / severances / legal case 0.6 0.4 54% 2.1 2.7 -21%
Other impacts / impacts from M&A activities 0.3 0.2 - 0.7 0.9 -
EBITA (Non-IFRS) 63.8 63.6 - 176.5 181.2 -3%
in % of revenue (Non-IFRS) 30.5% 32.2% 29.4% 29.7%
Net income (Non-IFRS) 44.7 43.1 4% 123.5 120.6 2%
EPS in € (Non-IFRS)* €0.60 €0.58 3% €1.67 €1.61 4%
75 |
* Estimated
AMORTIZATION / DEPRECIATION IMPACT
© 2018 Software AG. All rights reserved.
(PRELIMINARY)
Q2
2018
5.2
2.7
Q1
2018
5.3
2.7
FY
2018*
21.4
10.8
FY
2019*
21.0
11.2
FY
2020*
14.0
11.2
Q3
2018
5.5
2.7
(in €m)
Amortization
Depreciation
Q4
2018
5.4
2.7
76 |
CASH FLOW
© 2018 Software AG. All rights reserved.
Q3 2018 / YTD 2018 (9 MONTHS)
* Cash flow from investing activities except acquisitions and except investments in debt instruments
** yoy change because of one time property investment at Darmstadt
*** Based on weighted average shares outstanding (basic) Q3 2018: 74.0m / Q3 2017: 74.0m | YTD 2018: 74.0m / YTD 2017: 74.9m
(in €m) Q3
2018
Q3
2017 ∆%
YTD
2018
YTD
2017
∆%
Operating cash flow 38.6 37.6 3% 133.7 146.0 -8%
./. CapEx* -2.2 -2.1 -8.7 -24.7
Free cash flow 36.4 35.5 3% 125.0 121.3 3%
in % of revenue 17.4% 18.0% 20.8% 19.9%
Free cash flow per share*** €0.49 €0.48 2% €1.69 €1.62 4%
**
77 |
SEP 30,
2018
SEP 30,
2018
Assets Liabilities
BALANCE SHEET
© 2018 Software AG. All rights reserved.
(in €m)
DEC 31,
2017
DEC 31,
2017
365.8
279.6
55.3
1,125.9
1,907.5
Cash and cash equivalents
Financial assets
Trade and other receivables
Fixed assets
(Goodwill 968.7/ 921.4)
Total
80.9
Non-financial assets
310.6
357.8
120.8
1,118.3
1,907.5
Financial liabilities
Other liabilities
Deferred income
Shareholders’ equity
(ratio 60.2% / 58.6%)
Total
406.9
244.2 66.8
1,176.9
1,942.5
47.7
315.4
301.6
156.7
1,168.8
1,942.5
78 |
HEADCOUNT BY FUNCTIONAL AREAS* AND GEOGRAPHY
© 2018 Software AG. All rights reserved.
26% 1,176 (+6%)
19% 862 (+2%)
13% 623 (+3%)
42% 1,935 (+1%)
Research &Development
Sales &Marketing
Administration
Consulting &Services
26% 1,201 (+5%)
18% 823 (-4%)
13% 823 (+7%)
43% 1,997 (+2%)
Germany
India
USA
Rest of World
* According to P+L structure as of December 31, 2017
Total: 4,596 (FTE)
79 |
ALLOCATION OF CLOUD HOSTING REVENUE
© 2018 Software AG. All rights reserved.
NEW: WITHIN IoT/CLOUD REVENUE LINE (ADJ. FY 2017)
DBP FY 2017 (reported)
€455.3m
Consulting FY 2017 (reported)
€199.9m
Adj. DBP FY 2017
€456.4m (incl. Hosting)
Adj. Consulting FY 2017
€198.8m (excl. Hosting)
Cloud Hosting Revenue Q1 2017 Q2 2017
Q3 2017
Q4 2017
FY 2017
(€m) 0.216 0.248 0.294 0.303 1.061
80 |
IoT / CLOUD REVENUE SPLIT FOR 2017
© 2018 Software AG. All rights reserved.
In €m Q1 Q2 Q3 Q4 FY 2017
License 0.7 0.7 0.7 1.5 3.5
Maintenance 0.4 0.6 0.7 0.7 2.4
SaaS* 1.9 2.2 2.4 2.6 9.1
IoT / Cloud
Revenue 3.0 3.5 3.7 4.8 14.9
* Incl. Cloud Hosting Revenue
81 | © 2018 Software AG. All rights reserved.
8. SHARES & OWNERSHIP
82 |
SOW, SOW:GR, SOWGn.DE
ISIN: DE000A2GS401
ADR symbol: STWRY
Indices: MDAX, TecDAX, DAX100
Number of total shares: 74,000,000
Thereof Free Float: ~ 66%
Number of shares outstanding: ~ 74m
Registered shares since Oct. 2, 2017
33.7% 61.3%
Software AGFoundation
Own Shares (0.03%)
InstitutionalInvestors
Private Investors
38.9%
23.0%
19.6%
18.4%
Germany
North America
Continental Europe (excl.Germany)
UK + Ireland
Rest of World
BlackRock, Inc 5.004% Oct. 1, 2018
Deutsche Asset Mgmt. Investment 4.91% Oct. 20, 2017
Norges Bank 3.41% Oct. 5, 2017
Axxion S.A. 3.30% Mar.13, 2018
** according to notification of voting rights above
3% threshold of shares outstanding
SHAREHOLDER STRUCTURE
© 2018 Software AG. All rights reserved.
Share Data Major Institutional Shareholders** Share Info
OWNERSHIP REGIONAL SPLIT*
* Institutional Investors based on
public files, November 2018
83 |
0.30* 0.33* 0.37* 0.38*
0.43* 0.46 0.46 0.46
0.50 0.55
0.60 0.65
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
DIVIDEND POLICY
© 2018 Software AG. All rights reserved.
FOCUS ON CONTINUITY
Dividend by fiscal year
(in € per share)
* According to the 1:3 stock split, rounded
84 |
CASH USE:
© 2018 Software AG. All rights reserved.
SHARE BUY-BACK Buy-back own
shares 2013 – 2014
Avg. Share Price
2013: 29,27 € | 2014: 26,72 €
Cancellation of
treasury shares
April 30, 2015
Buy-back own
shares 2015
Sept. 8 - Dec. 4, 2015
Avg. Share Price: 25,81 €
Until cancellation/cap. reduction:
Share capital: 86,943,945.00 €
Number of shares: 86,943,945
€ 225m
9.2%
€ 70m
3.4%
- 9.1%
- 3.29%
Until cancellation/cap. reduction:
Share capital: 79,000,000.00 €
Number of shares: 79,000,000
Cancellation of
treasury shares
March 14, 2017
Since cancellation/cap. reduction:
Share capital: 76,400,000.00 €
Number of shares: 76,400,000
Own shares
Since March 27, 2018
Buy-back own
shares 2017
March 13 - May 11, 2017
Avg. Share Price: 38,49 €
€ 89m
3.27%
0.03%
Cancellation of
treasury shares
March 27, 2018
- 3.14%
Since cancellation/cap. reduction:
Share capital: 74,000,000.00 €
Number of shares: 74,000,000
85 |
CASH RETURN TO SHAREHOLDERS
© 2018 Software AG. All rights reserved.
Ø ¾ FREE CASH FLOW TURNS INTO DIVIDENDS AND SBB
0
50
100
150
200
250
2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018
Free Cash Flow
Share Buy-Back +Dividends
€m
86 |
SOFTWARE AG FOUNDATION
© 2018 Software AG. All rights reserved.
ANCHOR SHAREHOLDER
One of Germany’s ten largest foundations
(capital stock € 1bn+, Software AG shares and other assets)
Founded by Dr. h.c. Peter M. Schnell in 1992.
Disburses financial support amounting to approx. € 30 million annually
Imparts aid on principle of “self-help grant” (support of nonprofit organizations)
Focuses on many projects in different areas, including:
• science and research, environment
• support for the elderly and disabled, support for children and young people
• education and training
87 | © 2018 Software AG. All rights reserved.
Code of Business
Conduct and Ethics Values such as trust, respect,
sincerity and transparency shape
our international collaboration
and business.
Promoting Employee
Engagement We foster our employees'
personal and professional
development.
Corporate University
& University Relations Helping universities and their
students excel through grants
and collaboration.
Software AG We believe that moral
principles and economic
rewards not only go together,
they belong together.
CORPORATE SOCIAL RESPONSIBILITY
Software AG
Foundation One of Germany’s largest
charities & major shareholder of
Software AG
Creating sustainable value
88 |
ANALYST COVERAGE
© 2018 Software AG. All rights reserved.
Baader Helvea E.R.
Barclays Capital
Berenberg Bank
Bryan, Garnier & Co
Commerzbank
Crédit Suisse
Deutsche Bank
DZ Bank
Equinet
Goldman Sachs
Hauck & Aufhäuser
HSBC
Independent Research
J.P. Morgan Cazenove
Kepler Cheuvreux
LBBW
MainFirst Bank AG
Metzler
Morgan Stanley
Oddo BHF
Société Générale
UBS I.R.
Warburg Research
For the latest consensus of analysts‘ financial estimates
please visit our IR website
Banks / Broker who cover Software AG on a regular base
89 |
INVESTOR RELATIONS
© 2018 Software AG. All rights reserved.
Uhlandstrasse 12
64297 Darmstadt
Germany
phone: +49 (0) 6151 / 92 1900
fax: +49 (0) 6151 / 9234 1900
softwareag.com
e-mail: [email protected]
90 | © 2018 Software AG. All rights reserved.