Munich Investment Conferences - …/media/Files/S/Software-AG-IR/... · Gartner’s Magic Quadrant...

©2013 Software AG. All rights reserved.

Munich

Investment Conferences

Munich, September 24-26, 2013


2 |

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.

Safe-Harbor-Statement


3 |

Software AG - At a Glance

High performance database

Process Planning,

monitoring and analysis

Middleware to integrate data applications and

digital workflows

Big-data and In-memory technology

~ € 1bn revenue (FY)

~ 24% EBITDA margin (H1 2013)

~ 55% equity ratio (H1 2013)

~ 16% free cash flow margin (H1 2013)

~ 5,400 Employees worldwide

€ 2bn market cap

66% free float

29% Software AG Foundation

70 Countries

Global customer base: 80% of Fortune 10,000

Technology leader in systems integration,

process automation and data management


4 |

Financial Sector

Public Sector

IT

Associ-ations

Services

Manu-facturing

Telcos

Logistics Retail

Other

*Based on product revenue FY 2012

Revenue Split – Well Balanced

20%

20%

EMEA

44%

Asia Pacific

8% Americas

48%

GER 15%

PIIGS < 4%

Product Revenue by Region* Product Revenue by Industry*


5 |

Large Enterprise Customers in 70 Countries

Finance Public Sector Telecom Chemicals/Pharma Energy/Utilities

Manufacturing Logistics/ Transport

Healthcare/

Consumer Goods


6 |

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

…investing into Sales and

Marketing

O R G A N I C G R O W T H …

…in key strategic areas:

S E L E C T I V E M & A …

…addressing Mega Trends

for enterprise IT

I N N O VAT I O N …

• Drive current offering

• Complementary

technology

• Cloud

• Big Data

• Mobile

• Collaboration


7 |

Technology Leadership

Gartner’s Magic Quadrant for 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.


8 |

Technology Leadership

Application Integration Suites • • • • • Business Process Analysis Tools • • • Business Process Management Suites • • • Enterprise Architecture Tools • • Governance, Risk and Compliance • • • Integrated IT Portfolio Analysis Apps • Application Services Governance • • Complex Event Processing Platforms • • • Comprehensive Integration Solutions • • • • • EA Management Suites • Elastic Caching Platforms • • • ESB • • • • Integrated SOA Governance • • SOA Service Life-cycle Management •


9 |

Acquisitions Support Technology Leadership

2007

2008

2009

2010

2011 2012 2013

(Integration)

(Business Process)

(Big Data)

(Cloud)

(Mobile)

(IT Planning)

(CEP)

(Visualization)


10 |

0%

5%

10%

15%

20%

25%

30%

2008

2009

2010

2011

2012

9.0% 9.0%

8.9% 8.4%

8.4%

22.2% 21.6%

18.7% 18.1% 19.5%

25.8% 25.8% 24.2%

24.3% 25.8%

Innovation Through own R&D as well as Acquisitions

BPE R&D costs (incl. IPR amortization)

BPE R&D costs

ETS R&D costs

% of product revenue


11 |

Software AG Product Offering

Transaction PLATFORMS

Business Process and IT Management

PLATFORMS

Big Fast Data PLATFORMS

Integration and Automation

PLATFORMS

ALFABET

IT Planning and

Portfolio Management

ALFABET

Enterprise Architecture

Management

ARIS

Business Process

Analysis

ARIS

Governance,

Risk and Compliance

Management

WEBMETHODS

Integration

WEBMETHODS

Business Process

Management

WEBMETHODS

Intelligent Business

Operations

APAMA

Real-time Analytics

TERRACOTTA

In-Memory Data

Management

ADABAS-NATURAL

Application

Development

ADABAS-NATURAL

Database Management

System

ADABAS-NATURAL

Application

Modernization

Process Live AgileApps Live

Integration Live


12 |

Current Market Concerns

1. No revenue growth!

2. Higher volatility / less predictable business!

3. Profit decline!

4. What‘s the matter with accounting?

5. When will it turn around?


13 |


1. No revenue growth?


14 |

Revenue Drivers in Transition –

BPE outnumbers ETS / Consulting in Consolidation

0

100

200

300

400

500

600

700

800

2008 2010 2012 2013e*

(€m)

BPE

Consulting

ETS

39% 46%

54% 60%

539

423

712

335

182

697

* Analyst consensus; own poll


15 |





16 |

New Customers and Big Deals grow License Revenue

(€m)

0

20

40

60

80

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

(€m)

40

80

120

160

200

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

In the quarter: volatile

Four quarter rolling: steady growth

2008 2009 2010 2013 2011 2012

2008 2009 2010 2013 2011 2012


17 |




3. Profit decline!


18 |

Cost Ratios & Profitability – H1 2012/2013

(in €m)

Total

Revenue

Gross

Profit R&D

Sales & Marketing

H1 2013

H1 2012

313.3

-52.4 -146.8

Margin 24.2% (EBITDA)

513.2

462.7

Margin 26.7%

(EBITDA) 313.9

-49.6

-34.2

11%* 32%*

10%* 24%*

*as % of total revenue

68%*

111.9

86.0

61%*

-120.9

+2.7

-35.2 +7.1

Admin Other

8%*

7%*

(in €m)

25.9 25.9

EBIT

(IFRS)


19 |

0%

10%

20%

30%

40%

50%

60%

23.0% 21.6% 20.7%

21.3% 20.9%

19.5%

44.9% 42.2%

39.2% 37.1% 39.1%

51.8%

Strengthen Software AG’s Sales Organization - Worldwide

% of product revenue

BPE S&M costs

ETS S&M costs

+ 2 0 0 s a l e s

i n B P E d i v i s i o n


20 |




3. Profit decline!



21 |

121 188

195

190

• Direct sales force & partners

• One-time payment for perpetual license

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

• Price: Capacity/MIPS or CPU based

• Renewal rate > 90%

• Annual payment: - BPE: ca. 18% of license - ETS: ca. 15% of license

• Implementing products

• Cost plus or fixed price projects

• Own staff + partnership

Revenue Structure and Recognition

€ 1,047m*

Revenue Elements

License

Maintenance

Consulting

319 393

335

License

Maintenance

Consulting

Maintenance License

BPE BPE

ETS ETS

319 393

* FY 2012


22 |




3. Profit decline!


5. When will it turn around?


23 |

Margin Drivers 2014+

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)


24 |

Enterprise Transaction Systems

ETS

• Product revenue in

structural decline

(single digit % p.a.)

• Manage cost to

maintain operating

margin > 60%

Business Process Excellence

• Product revenue: growth ca. 15-20% p.a.

(incl. a 50-100% growth from Terracotta)

• > 50% contribution to group result

• Expand Big Data offering by Real Time BI

platform

BPE

• Increase BPE product

revenue to € 1bn

• Strategic acquisitions

(cash-only; Cloud/

Big Data)

• EPS growth

10-20% p.a.

(2013-2018)

Software AG Group

S H A R E O F P R O D U C T R E V E N U E *

Business Targets 2012 - 2018 (2018, base: 2012)

* According to mid-term business goals


25 |

~80%

Enterprise Transaction

Systems (ETS)

New Products (BPE)

• Organic Growth

• Integration Technology

• Business Process Mgt.

• Terracotta / Big Data

• Cloud

• Partner / OEM

• M&A/Innovative Technologies

2012 2018

45%

€1 Billion

20%

80%

2006

55%

~20%

Revenue Targets 2012 - 2018

Product Revenue


26 |

Solid Business Foundation

1. Footprint: Established global software player with blue chip customer base

2. Financials: Strong balance sheet and cash generation

3. Assets: Experienced management team and loyal expert staff

4. USP: Unique technology leadership in IT mega-trends / growth segments

5. Timing: Almost past ramp-up investments for future growth /

margin leverage ahead


Follow us on Twitter:

@SoftwareAG_IR

Investor Relations

Uhlandstrasse 12

64297 Darmstadt

Germany

phone: +49 (0) 6151 / 92 1900

fax: +49 (0) 6151 / 9234 1900

softwareag.com

e-mail: [email protected]

mailto:[email protected]

Date post:	07-Sep-2018
Category:	Documents
Upload:	phamxuyen
View:	215 times
Download:	0 times

Munich Investment Conferences - …/media/Files/S/Software-AG-IR/... · Gartner’s Magic Quadrant...

Documents