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INVESTOR RELATIONS FACTBOOK
October 2017
© 2017 Software AG. All rights reserved.
1 |
A DAY IN THE LIFE OF SOFTWARE AG
06.15
© 2017 Software AG. All rights reserved.
2 |
A DAY IN THE LIFE OF SOFTWARE AG
06.59
© 2017 Software AG. All rights reserved.
3 |
A DAY IN THE LIFE OF SOFTWARE AG
07.45
© 2017 Software AG. All rights reserved.
4 |
A DAY IN THE LIFE OF SOFTWARE AG
10.00
© 2017 Software AG. All rights reserved.
5 |
A DAY IN THE LIFE OF SOFTWARE AG
11.15
© 2017 Software AG. All rights reserved.
6 |
A DAY IN THE LIFE OF SOFTWARE AG
13.00
© 2017 Software AG. All rights reserved.
7 |
A DAY IN THE LIFE OF SOFTWARE AG
17.00
© 2017 Software AG. All rights reserved.
8 |
A DAY IN THE LIFE OF SOFTWARE AG
17.30
© 2017 Software AG. All rights reserved.
9 |
A DAY IN THE LIFE OF SOFTWARE AG
18.00
© 2017 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 technologies and changes in business strategy. Software AG does not intend
or assume any obligation to update these forward-looking statements.
This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way
securities of Software AG or any of the companies that are members of the Group at present or in the
future, nor does it form part of such an offer and it should not be understood as such. This presentation
does not constitute an offer of sale of securities in the United States of America. Securities may not be
offered or sold in the United States of America without registration or exemption from registration in
accordance with the U.S. Securities‘ Act of 1933 in its currently valid form.
© 2017 Software AG. All rights reserved.
SAFE-HARBOR-STATEMENT
3 |
SOFTWARE AG AT A GLANCE
© 2017 Software AG. All rights reserved.
Technology leader for more than 40 years in data management
and application development platforms
~ €3bn MARKETCAP
~ 64% Free Float
€870+ MILLION
IN REVENUE
45%+ recurring
77% product revenue
4,400+ EMPLOYEES**
R&D 25%
S&M 19%
Consulting
&Services
43%
Admin
13%
47%
Americas
45%
EMEA
REVENUE
51%
DBP
26%
A&N
23%
Services
BY REGION* BY BUSINESS LINES*
* Based on Group product revenue – FY 2016 **P&L as of December 31, 2016
4 |
BUSINESS LINES
© 2017 Software AG. All rights reserved.
*Group revenue split FY 2016
Share of
Revenue* 51%
Growing Revenue
• Process
• Integration
• Analytics & Decisions
• In-Memory Data
• Business & IT Transformation
Share of
Revenue*
Growing Stability
• Application Development
• Data Management System
• Modernization
Share of
Revenue*
Growing Margin
• Strategy & Design
• Product Implementation &
Customized Solutions
• Education & Cloud Services
• Global Delivery (on-/offshore)
27% 22%
5 |
Revenue in €m:
EBITDA
DBP Product revenue
A&N Product revenue
PROFITABLE GROWTH
© 2017 Software AG. All rights reserved.
STRATEGY EXECUTION
284 234
441
2006 2016
Adabas & Natural
Extending Lifecycle
69
31.2%
24.7%
Stable core + profitable
(program 2050+)
EBITA, non-IFRS
2012
Operating margin
6 |
INFLECTION POINTS
© 2017 Software AG. All rights reserved.
WHEN DIGITAL BUSINESS PLATFORM TAKES THE LEAD
0%
20%
40%
60%
80%
100% License Revenue
0%
20%
40%
60%
80%
100% Maintenance Revenue
2012
0%
20%
40%
60%
80%
100%Business Segment Result
2017 / 2018
2010
Adabas & Natural
Digital Business Platform
7 |
INDEX
© 2017 Software AG. All rights reserved.
Key Investment Indicators 1. 8
Business Model, Characteristics & GTM 2. 22
Markets, Positioning & Competition 3. 31
Digital Business Platform - Core Capabilities 4. 43
Customers References & Use Cases 6. 65
Financials 7. 70
Shares & Ownership 8. 88
IoT Platform – Offering and Core Capabilities 5. 48
8 |
1. KEY INVESTMENT INDICATORS
© 2017 Software AG. All rights reserved.
9 |
KEY INVESTMENT INDICATORS
© 2017 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ 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 by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 45+ percent of revenue is recurring (maintenance)
• High operating margin (2016: 31.2%)
• 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
© 2017 Software AG. All rights reserved.
BUILT OVER 40+ YEARS (SAMPLES)
Finance IoT/Manufacturing
11 |
20%
19%
18% 12%
10%
Government Financial Services
IT Services Manufacturing
Services Telco & Media
Transport & Logistics Other
BALANCED RISK
© 2017 Software AG. All rights reserved.
REVENUE BY GEOGRAPHY AND INDUSTRY
Product Revenue by Region* Product Revenue by Industry*
47%
45%
(13%)
8%
Americas
EMEA (13% Germany)
Asia Pacific
*Based on Group product revenue – FY 2016
12 |
EXPERIENCED MANAGEMENT TEAM
© 2017 Software AG. All rights reserved.
AND LOYAL EXPERT STAFF
Arnd Zinnhardt Chief Financial Officer
- since 2002 -
Finance, Controlling,
Taxes, Treasury,
Business Operations,
Mergers & Acquisitions,
Investor Relations,
Global Purchasing
Dr. Stefan Sigg Chief R&D Officer
- since 2017 -
Global R&D Operations,
R&D Quality Assurance,
Research Programs,
Product Innovations
Dr. Wolfram Jost Chief Technology Officer
- since 2010 -
Product Management,
Product Marketing,
Industry Analyst Relations
Product Innovations
Eric Duffaut Chief Customer Officer
- since 2014 -
Sales, Marketing, Partner
Ecosystem, Global
Consulting Services &
Support
Karl-Heinz Streibich Chief Executive Officer
- since 2003 -
Corporate Office
Human Resources, Legal,
Information Services (IT),
Corporate Communications,
Processes, Audits & Quality,
Environmental, Social and
Governance (ESG)
13 |
KEY INVESTMENT INDICATORS
© 2017 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ 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 by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 45+ percent of revenue is recurring (maintenance)
• High operating margin (2016: 31.2%)
• Continuous return to shareholders (Dividend + SBB ≙ ¾ of free cash flow on average)
14 |
TECHNOLOGY LEADERSHIP
© 2017 Software AG. All rights reserved.
SOFTWARE AG SUITE IS A LEADER IN 7 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.
• In-Memory Data Grids, Q3 2015
• Hybrid Integration For Enterprises, Q4
2016Q4 2016
• Enterprise Architecture Management, Q2
2017
• Enterprise Architecture Tools, May 2017
Magic Quadrants
• Integrated IT Portfolio Analysis
Applications, November 2016
• Digital Process Automation, Q3 2017
Please assess the waves via the hyperlinks
• Streaming Analytics, Q3 2017
15 |
INNOVATOR FOR
© 2017 Software AG. All rights reserved.
COMPETITIVE DIFFERENTIATION
WORLD’S
1st
high-performance
transactional data
management
ADABAS &
NATURAL
B2B server and
SOA integration platform
WEBMETHODS
business process analysis
and design platform
ARIS
Big data & streaming
analytics platform
TERRACOTTA
APAMA
THE FIRST THE FIRST THE FIRST THE FIRST
16 |
NEUTRAL - BECAUSE WE ARE
© 2017 Software AG. All rights reserved.
VENDOR INDEPENDENT
Our solutions work in
harmony with any
existing IT landscape.
We make all leading
databases and application
platforms work in synergy
with one another.
We won’t lock our
customer into
proprietary systems.
17 |
KEY INVESTMENT INDICATORS
© 2017 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ 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 by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 45+ percent of revenue is recurring (maintenance)
• High operating margin (2016: 31.2%)
• Continuous return to shareholders (Dividend + SBB ≙ ¾ of free cash flow on average)
18 |
LICENSE REVENUE: ⅔ FROM GROWING IT MARKETS
© 2017 Software AG. All rights reserved.
0%
20%
40%
60%
80%
100%
2006 2008 2010 2012 2014 2016 H1 2017
A&N
DBP
DBP offering focused on IT digitization segments, like IoT, streaming analytics etc.
19 |
RECURRING MAINTENANCE REVENUE
© 2017 Software AG. All rights reserved.
0
100
200
300
400
2010 2011 2012 2013 2014 2015 2016
A&N
DBP
353 362 378 369 369
407
>45% of Group Revenue
from Maintenance
in €m
48%
Maintenance
>90% recurring
30%
License
22%
Consulting
412
20 |
200
300
400
500
600
2015 2017 2019 2021 2023 2025
*renewal rate ca. 93-95%
400
500
600
700
800
2015 2017 2019 2021 2023 2025
© 2017 Software AG. All rights reserved.
A) +10% CAGR
B) flat
€m
€m
€m
MAINTENANCE REVENUE SHOWS COMPOUND GROWTH
DBP Maintenance:
Renewal Rate: 93% (2015-2018), 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%
FY2016
29.7%
FY2015 26.8%
FY2013
27.9%
FY2014
SOFTWARE AG
© 2017 Software AG. All rights reserved.
INVESTMENT KPI
44%
Mainte-
nance
32%
License
24%
Consulting
Growing share of product and recurring revenues
€0.50
€0.60
2014 2016
Dividend increase
Free Cash Flow
conversion rate
around 130% of
Net profit.
50%
90%
130%
170%
2012 2013 2014 2015 2016
yield: 1.7%
Operating margin* expansion
FY 2014 * non–IFRS EBITA in % of revenue FY 2016
48%
Mainte-
nance
30%
License
22%
Consulting
32 – 35%
(2020 target)
cash-out ratio:
25 – 33%
31 – 32%
FY2017e
22 | © 2017 Software AG. All rights reserved.
2. BUSINESS MODEL, CHARACTERISTICS & GTM
23 |
0%
10%
20%
30%
40%
Q1 Q2 Q3 Q4
License Maintenance Services
BUSINESS MODEL
© 2017 Software AG. All rights reserved.
REVENUE STRUCTURE & LICENSE VOLATILITY
License
• 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
Maintenance:
• Annual Payment (renewal rate >90%)
• Price based on license volume:
• DBP: up to 22% (new); (≤20% installed)
• A&N: 15% (mainframe); 20% (other)
Consulting Services
• Implementing own products
• Cost plus or fixed price projects
• Own staff + freelance and partners
Ø quarterly share of respective
FY revenue 2014 - 2016
24 |
Capabilities Benefits
ADABAS Data Management System
• Data management for high-performance
transaction processing
• Multi-platform availability
• Faster and more reliable data processing
• Easily share data 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
• Meet business demands faster
• Retain business logic independent from
platform decision
ADABAS & NATURAL Application Modernization
• Improve end-user experience and
interoperability of applications
• Leverage new technologies—the Web,
mobile, SOA or big data
• Retain investments without risk
• Increase end-user productivity
• Innovate faster
ADABAS & NATURAL – TRANSACTION PROCESSING
© 2017 Software AG. All rights reserved.
25 |
ACQUISITIONS SUPPORT TECHNOLOGY LEADERSHIP
Integration and BPM Business Process Analysis Big Data (In Memory)
Application PaaS
2007 2008 2009 2010 2011 2012 2013 2016
© 2017 Software AG. All rights reserved.
*A&N Portfolio (all other DBP)
Internet of
Things
2017
Artificial
Intelligence
* *
Streaming
Analytics
26 |
PARTNER SOLUTIONS
© 2017 Software AG. All rights reserved.
DIGITAL MARKETPLACE - A CREDIBLE INDUSTRY ECOSYSTEM
MEDIA BACKBONE
CONDUCTOR
SCHEER BPAAS
ARIS MOBILE SERVICES
INTRADAY LIQUIDITY
MONITORING
CONNECTED SERVICE
EXPERIENCE
ACCORD ALFABET
ACCELERATOR
CONTINUOUS
ASSURANCE
WIPRO LOOKING
GLASS
GLOBAL OPERATIONS
SOLUTIONS
SMART WORK
BENCH
AUTOMATED
TEST ENGINE
PREDICTIVE
MAINTENANCE
SERVICE
INTEGRATION SUITE
27 |
NEW GO TO MARKET
© 2017 Software AG. All rights reserved.
KEY INITIATIVES
Pipeline Volume: +20% (UW)
Deals in Pipeline over €1m: more than doubled
New Service (EAS) drives maintenance growth
KPIs 2015 - 2016
Demand Generation (DBP)
Industry Use Cases (DBP)
Maintenance Revenue (Group)
Sales Productivity (DBP)
OPTIMIZE TO PERFORM
Cloud (DBP)
Business Line Margin Improvement 700bps
Sales Productivity: +20% CAGR
Cloud revenue high double-digit growth
Roughly 100 industry use cases developed
Majority is Partner originated
28 |
90
95
100
105
110
115
120
DBP Business Line 4 Quarter rolling average
40
42
44
46
48
50
DBP License 4 Quarter rolling average
SOFTWARE AG – DBP REVENUE TREND
© 2017 Software AG. All rights reserved.
€m
Trend
€m
Q2 14 -
Q1 15
Q3 14 -
Q2 15
Q4 14 -
Q3 15
Q1 15 -
Q4 15
Q2 15 -
Q1 16
Q3 15 -
Q2 16
Q4 15 -
Q3 16
Q1 16 -
Q4 16
Trend
Q2 14 -
Q1 15
Q3 14 -
Q2 15
Q4 14 -
Q3 15
Q1 15 -
Q4 15
Q2 15 -
Q1 16
Q3 15 -
Q2 16
Q4 15 -
Q3 16
Q1 16 -
Q4 16
Q2 16 -
Q1 17
Q2 16 -
Q1 17
Q3 16 -
Q2 17
Q3 16 -
Q2 17
29 |
SOFTWARE AG CLOUD
Capabilities Benefits
ARIS Cloud
• Design, publish and analyze processes
and requirements
• Social collaboration
• Easy to access and use
• Collaborative cross-company
alignment of requirements
ALFABET Cloud
• Plan, manage and optimize IT portfolios
and assets
• Visual inventory, planning tools
• Full transparency across IT portfolios
• Holistic analysis and planning
• Optimize IT assets
WEBMETHODS AgileApps Cloud
• Fast, easy creation of process-
driven agile applications
• Native mobile support
• Improves customer, partner
and employee engagement
• Reduced project backlog
WEBMETHODS Integration Cloud
• Cloud-to-cloud integration
• Cloud-to-on-premises hybrid integration
• Business friendly & web-based UI
• Faster time to market
• Collaborative integration
• Leverage existing systems
© 2017 Software AG. All rights reserved.
30 |
SOFTWARE AG 2015 2020
© 2017 Software AG. All rights reserved.
• Customer Centric Co-Innovation
• Digital Business Platform Best of Suite
• Multi Channel Sales & Marketing
• Cloud Enablement of Portfolio
• M&A Readiness continues
• Deployment Services Framework
SUCCESS FACTORS
INVESTMENT FOCUS:
• Profitable organic growth
• Margin 2020: 32-35% (EBITA non-IFRS)
• DBP > 10% license growth CAGR
• A&N Customer Life Cycle Enhancement
• Continuous Corporate Efficiency Program
• Expand Innovation Leadership
• Dividend Payment / Share Buy Backs
CORE TARGETS
31 | © 2017 Software AG. All rights reserved.
3. MARKETS, POSITIONING & COMPETITION
32 |
DISRUPTION IS EVERYWHERE
© 2017 Software AG. All rights reserved.
ALL OF THE TIME
Resurgent Risk Managers Connected Customers Internet of Things
• Regulation causing significant and
continuous change
• Controls are slow to respond to
changing business risks
• Controls rooted in analysis of the
past and slow to respond
• Large number and variety of data
sources needed to derive “context”
• Unable to combine customer
insights, inventory and competitor
data “on the fly”
• Extreme speed and scale needed to
act on customer context
• Integration with countless “things”
disrupting enterprise architectures
• Unable to automate maintenance
scheduling, procurement and other
core business services
• Challenged to combine historical
and streaming big data “on the fly”
33 |
DIGITIZATION WEDGE SEPARATES CUSTOMERS FROM ESTABLISHED COMPANY
© 2017 Software AG. All rights reserved.
DIGITAL DISRUPTION
Any industry ... Pharma Retail Manufacturing Insurance
Digital Disruption
Internet of Things
Smart Business
Connected Customers
34 | © 2017 Software AG. All rights reserved.
35 |
KEY MESSAGE & MISSION
© 2017 Software AG. All rights reserved.
The digital experience is based on open and
flexible digital platforms instead of monolithic
and complex “ERP” mega suites.
KEY MESSAGE
To design, built and implement the leading
platform for the digital enterprise and IoT.
MISSION
36 |
SOFTWARE AG – PROMOTES THE PARADIGM SHIFT
© 2017 Software AG. All rights reserved.
Digital business is disrupting business
operations in a way we have never seen
before (Big Change)
1
Today‘s conventional business applications
are not able to meet the demands and
challenges of digital business 2
A new generation of business applications is
needed which is based on agility, flexibility &
speed: “Digital Business Applications”
3
The technology foundation for managing the
digital change (processes, IT) and building
digital business applications is the “Digital
Business Platform”
5
The paradigm is no longer buying packaged
applications. The new paradigm is buy (platform)
and build (business logic) 4
Software AG delivers the world‘s first Digital
Business Platform 6
37 | © 2017 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!
DIGITAL CHALLENGERS SEPARATE CUSTOMERS FROM ESTABLISHED COMPANIES
Manufacturing
38 |
Customized / modeled Business Logic Standard Apps Business Logic
DIGITAL TRANSFORMATION
© 2017 Software AG. All rights reserved.
FROM APP - SILOS TO A DIGITAL SOFTWARE PLATFORM
Innovation only through vendor
Open, flexible agile • Sprint projects
Real time visibility • Short project cycle
PREVIOUS ARCHITECTURE: SILO NEW ARCHITECTURE: PLATFORM
Monolithic • Complex • Inflexible/slow
Business Logic
Integration
Process
Data
(all in one app)
Business Transformation
IT Portfolio
Management
Hybrid Cloud
Integration
APP Development
Big Data Analytics
Internet of Things
iBPMS
Digital Software Infrastructure Platform
Process/ Integration/ Big Data
39 |
Front office
Customer engagement systems
DIGITAL BUSINESS PLATFORM
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
• Standardization
DIGITAL BUSINESS APPLICATIONS
© 2017 Software AG. All rights reserved.
DRIVE THE DIGITAL BUSINESS
40 | © 2017 Software AG. All rights reserved.
Global Infrastructure Software Market Segments related to Digital Business Platform – market
segments related to DBP’s 5 building blocks + IoT
Software Market Segment Market Size 2016 ($b) Growth 2016/20 (Δ %)
Integration 7.1
BPM 2.8
Bsn.&IT Transfor. – Analtc&Dec. 9.6
In-Memory Data 4.2
IoT Platform* 0.4
Total related market 24.1
Chart created by Software AG based on Gartner Research, Source: Market Share: All Software Markets, Worldwide, 2017 Published: 20 March 2017 ID: G00323032
* IoT Platforms Market Report 2015-2020, published by IoT Analytics
DIGITAL BUSINESS PLATFORM - MARKET SIZE & GROWTH
41 |
BLOOR RESEARCH, STREAMING ANALYTICS 2016
© 2017 Software AG. All rights reserved.
Software AG’s “comprehensive combination of
performance and scalability, streaming
analytics operators, graphical tools and solution
accelerators for application development” puts
it at the top of the class
42 |
TOP SIX 2017 PREDICTIONS FOR APPLICATION INTEGRATION
Integration With APIs
APIs are part of a bigger market and an extension of
integration
The IT community is recognizing the value of APIs for
application integration
Integration
Microservices Mature
Microservice architecture will be taken into production with real projects
Integration vendors will go to market with microservices using important supporting technologies such as containers (Docker, Kubernetes, etc.)
Rise Of The Chatbots
Artificial Intelligence is everywhere – especially with the rise of chatbots and virtual assistants
There will be an increase in the need for bots to have timely data such as customer, product and service data to improve the virtual experience of customers
IoT Integration Everywhere
As more companies move into real IoT implementations, the role of integration as the broker “Thing” data will become fully realized
Data is only valuable if it gets delivered
Blockchain Integration
Blockchain technology for fast and secure payments increases in different industries
Integration will be the key that ties these initiatives into business by adding new channel for secure and fast business
© 2017 Software AG. All rights reserved.
Specialists Not Required
Integration tools will need to accommodate multiple user types along
with traditional developers
Integration vendors will need to provide tooling for ad hoc and non
technical developers as well as specialists, including graphical, low
code solutions
43 | © 2017 Software AG. All rights reserved.
4. DIGITAL BUSINESS PLATFORM – CORE CAPABILITIES
44 |
© 2017 Software AG. All rights reserved.
DIGITAL BUSINESS DEFINITION
Business transformation through the
implementation of new digital business technology
to create new business designs (by connecting the digital and physical worlds)
Manage business
and IT transformation
Develop, deploy and
integrate digital
business applications
45 |
Core ERP (SOR) Legacy BI Things
PaaS SaaS
THE NEW DIGITAL IT ARCHITECTURE BIMODAL AND INTEGRATION CENTRIC
DIGITAL BUSINESS PLATFORM (PaaS Suite)
+ HYBRID
CLOUD
ON PREMISE
Systems of Differentiation (Digital Applications)
Big Data Partners Mobile Apps
Modular, Agile, Flexible, Fast, Differentiating
© 2017 Software AG. All rights reserved.
46 |
ANALYTICS & DECISIONS Streaming Analytics Operational Intelligence
PROCESS Business Process Management
Agile Applications
INTEGRATION Integration
API Management
IN-MEMORY DATA In-memory Data Fabric
BUSINESS & IT
TRANSFORMATION
Business Process
Analysis
Governance, Risk &
Compliance
IT Portfolio Management
Enterprise Architecture
Management
+ HYBRID
CLOUD
ON PREMISE
© 2017 Software AG. All rights reserved.
powered by
ARIS & ALFABET
powered by
TERRACOTTA
powered by
WEBMETHODS
powered by
APAMA & WEBMETHODS
powered by
WEBMETHODS
DIGITAL BUSINESS PLATFORM YOUR PLATFORM TO INNOVATE, DIFFERENTIATE AND WIN IN THE DIGITAL WORLD
47 |
© 2017 Software AG. All rights reserved.
DIGITAL BUSINESS PLATFORM CAPABILITIES
Business strategy
& planning
Collaboration
Design &
analysis
Risk & compliance
management
Audit
management
Portfolio
management
Enterprise
architecture
BUSINESS & IT
TRANSFORMATION
PROCESS
IoT
integration
INTEGRATION
Pattern
detection
Mobile
enablement
Application
integration
Mobile
integration
In-Memory data
management
Visual
analytics
Business
dashboards
Process
automation
Task
management
B2B
integration
Services
governance
Universal
messaging
Predictive
analytics
Process
discovery
Application
development
Rules
management
API
gateway
Integration
services
Search &
compute
Event
processing
Process
monitoring
Case
management
Process
orchestration
API
portal
Cloud service
integration
Continuous
query
IN-MEMORY
DATA
ANALYTICS &
DECISIONS
48 | © 2017 Software AG. All rights reserved.
5. IOT PLATFORM – OFFERING AND CORE CAPABILITIES
49 |
INTERNET OF THINGS
IoT
PLATFORM, APPLICATION AND BUSINESS SOLUTION
© 2017 Software AG. All rights reserved.
An IoT platform is a set of software
technologies that monitors, controls,
optimizes and manages various types of IoT
endpoints. This happens via IoT applications
developed, integrated and deployed on the IoT
platform.
An IoT business solution is an combination of
IT/OT assets, IoT endpoints (including IoT
gateways), IoT platforms (including related IoT
applications) and non IoT back end system.
“You don´t buy an IoT Business
Solution, you assemble and built it.” “There is no commercial-off-the-shelfs
(COTS) end-to-end IoT Business Solution.
And it is unlikely that there ever will be.”
Gartner about IoT business solutions
50 |
INTERNET OF THINGS (IOT) PLATFORM OF SOFTWARE AG
© 2017 Software AG. All rights reserved.
Connected Devices
Enterprise
IoT Solutions
& Applications
Predictive
Maintenance
Smart
Production
Connected
Customer
Smart
Logistics
Development
& Delivery Environment
Application
Development
Portals &
API Gateway
Data
Visualizations
IoT Edge Services Lightweight
Messaging Edge Analytics
Device Connectivity &
Embedded Agents
Business
Systems
&
Partner
Networks
&
Ecosystems
IoT Platform
Services
Agile Business
Process Management
Predictive Analytics &
Machine Learning Streaming Analytics
In-memory
Data Management
Enterprise Integration
Visual
Analytics
Device Management Ad Hoc
Historical Analytics
API Management
+
IoT
Fo
un
da
tio
n
51 |
SOFTWARE AG IOT OFFERING TWO DIMENSIONS, ONE CONTINUUM
© 2017 Software AG. All rights reserved.
9.12
(open) IoT Framework High Control
• Modular software building blocks
• On-premise, private cloud first
• Horizontal approach
• Best-of-breed, multi-vendor
approach to avoid lock-in
• Flexible and extensible
• Focus on IT, ownership with CIO
• Developer driven
• Wide range of licensing options
IoT Cloud Service High Productivity
• Out-of-the-box
• Cloud first
• Vertical approach
• From connectivity to
pre-defined solution accelerators
• Fast Go-to-Market
• Focus on business users
• Configuration driven
• Pay-as-you-grow business model
52 |
SOFTWARE AG OPEN IOT FRAMEWORK
© 2017 Software AG. All rights reserved.
REQUIRES A “PERVASIVE” APPROACH TO INTEGRATION
Open IoT
Integration
“Things”
Mobile Apps
Social Networks On-Premises
Applications and Data Sources
Business
Process
Networks
Business
Partners
Subsidiaries
SaaS/Cloud
Services
EDW Mart
MDM
53 |
OPEN IOT FRAMEWORK FOR ESTABLISHED COMPANIES
IoT FRAMEWORK
IoT DEVELOPMENT SERVICES
IoT INTEGRATION SERVICES
Application
Integration
API
Management
Device
Integration
Condition
Monitoring
System Performance Management
Location Awareness
Predictive
Maintenance
Process
Integration
…
…
Streaming
Analytics Pattern
Detection
Edge
Analytics
Predictive
Decisioning …
Visual
Analytics
Admin IT
SAP, CRM,
PLM, CAD, ...
External
Services Ext. Cloud
Integration,
OEM Portal, …
Partners /
Customers APPs , Portale,
Mobile Integration
…
Devices
INDIVIDUAL
IoT BUSINESS
SOLUTIONS
IoT PLATFORM
SERVICES
FLEXIBLE SYSTEM
INFRASTRUCTURE IoT CLOUD INFRASTRUCTURE
© 2017 Software AG. All rights reserved.
54 |
SOFTWARE AG IOT PLATFORM SERVICES
© 2017 Software AG. All rights reserved.
Digital Business Platform Container
IoT
Analytics Device
Integration
Enterprise
& Cloud
Integration
IoT Integration
IoT Modeling &
Portfolio Mgmt
IoT Development
55 |
SOFTWARE AG MAIN ACQUISITIONS FOR IOT
© 2017 Software AG. All rights reserved.
EXTENDS OUR TECHNOLOGY LEADERSHIP
• 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
AI, machine learning & predictive analytics
• Integration
• Visualization and Templates
• Real-time Analytics
• Device Management
• Connectivity
IoT PaaS – End-to-End Cloud Platform
56 |
57 |
5 PARTNERS – 5 PROMISES JOINT VENTURE
58 |
59 |
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
60 |
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
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
General
Management
• ADAMOS JV, is responsible to
provide state-of-the-art software and
solutions, independent of specific
software vendors (no lock in)
• ADAMOS JV is 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
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
61 |
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 INNOVATION
& CERTIFICATION
COUNCIL
App App App
NEW
NEW
62 |
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
Enterprise & Cloud Integration
Device
Connectivity &
Management
Real-time
Analytics &
Visualization
Workflow
Automation …
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
63 |
ADAMOS.COM
TIMELINE
5.9.2017
Launch
Announcement
19.9.2017
1st PUBLIC
VISIBILITY
AT EMO FAIR
HANNOVER
START RAMP-
UP OF
ADAMOS
1.10.2017 Jan 2018
GO-LIVE
MAJOR
APPS
64 |
65 | © 2017 Software AG. All rights reserved.
6. CUSTOMER REFERENCES & USE CASES
66 |
IOT
© 2017 Software AG. All rights reserved.
USE CASES
Analyzing driver behavior to offer smart insurance
policy
Save money on your car insurance
Monitoring machines in real-time and proactively
addressing service issues
Offer enhanced service for equipment installed on
premise
Smart Insurance
Usage based insurance
Predictive Maintenance
Offer Proactive Services
IoT Business Modelling
In-memory data storage and processing solutions to
enable real-time assessment
Real-time data analytics and decision making using
environmental sensors and risk assessment systems
67 |
CO-INNOVATION CUSTOMERS
© 2017 Software AG. All rights reserved.
68 |
SINCE PARTNERING
© 2017 Software AG. All rights reserved.
WITH SOFTWARE AG
SAVED SEVERAL MILLION
IN SIX MONTHS
HAS DOUBLED THEIR
EFFICIENCY AND
PROFIT MARGINS
EMERGENCY-PREPARED
40,000+ EMPLOYEES
AND CONTRACTORS
TRACKED
SLA COMPLIANCE
IN REAL TIME
SAW A SUPPLY CHAIN
TRANSFORMATION IN
JUST DAYS
35% REDUCTION
OF VEHICLE INVENTORY
WITHIN 3 YEARS
69 |
SINCE PARTNERING
© 2017 Software AG. All rights reserved.
WITH SOFTWARE AG
PRODUCED A FASTER
SOLUTION DELIVERY IN 3
MONTHS INSTEAD OF 18
ACHIEVED REAL-TIME
SYSTEM RESPONSIVENESS:
99.99984% AVAILABILITY
REDUCED PROCESS COST
BY MORE THAN 20%
CONSOLIDATED 300+
PROCESSES WITH 24 MIL
DATA EXCHANGES A MONTH
CUSTOMER
ON-BOARDING
BECAME 30% FASTER
SERVED VIP CUSTOMERS
IN 2 MINUTES INSTEAD
OF 20 MINUTES
CERN
70 | © 2017 Software AG. All rights reserved.
7. FINANCIALS
71 |
* EPS basic, 2007 – 2010 pro-forma, adjusted for share split (2011)
in €m, IFRS 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
Total Revenue 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 441.4 431.5 394.5 422.9 385.5 339.6 321.5 247.2 210.7 149.9
BL A&N 234.6 248.0 245.3 274.5 310.5 313.9 355.4 328.5 332.1 310.2
BL Consulting 195.8 193.6 218.0 275.4 351.3 444.8 441.4 271.3 177.8 161.1
Group License 263.0 271.9 270.1 330.1 318.9 295.2 327.4 269.9 272.0 241.3
Group Maintenance 412.2 406.9 371.3 375.6 393.3 378.7 369.4 310.6 267.1 212.9
EBIT 213.9 209.4 176.0 205.5 248.3 269.2 268.6 218.2 180.5 136.8
EBITA (non-IFRS) 272.0 259.1 239.3 260.7 298.9 n/a n/a n/a n/a n/a
EPS (in €, non-IFRS)* 2.37 2.22 1.96 2.07 2.31 n/a n/a n/a n/a n/a
Dividend cash out 41.9 39.5 39.5 36.3 38.2 39.9 37.0 32.6 31.5 28.5
Free cash flow 187.0 170.0 132.7 159.1 170.7 187.7 217.8 188.4 133.4 82.2
Net cash / Net debt 73.1 -25.7 -15.1 -50.4 49.7 -60.9 -167.2 -271.8 -70.3 -133.0
Shareholders‘ equity 1,195.6 1,089.8 1,013.4 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5
Employees (FTE) 4,471 4,337 4,421 5,238 5,419 5,535 5,644 6,013 3,526 3,479
FINANCIAL DATA
© 2017 Software AG. All rights reserved.
KEY FIGURES
72 |
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 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007
Operating margin (EBITA, non-IFRS)
31.2 29.7 27.9 26.8 28.5 n.a. n.a. n.a. n.a. n.a.
EBITDA margin 29.1 29.7 26.4 26.6 28.6 28.7 28.1 30.3 28.6 25.7
EBIT margin 24.5 24.0 20.5 21.1 23.7 24.5 24.0 25.8 25.1 23.3
ROE1 17.9 19.2 17.4 21.3 23.4 28.3 34.9 33.7 32.9 31.8
ROCE2 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 -€200.2 -€155.9 -€98.1 -€213.5 -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0
Working Capital ratio4 20.0 16.6 25.7 24.3 26.2 17.5 -8.2 0.8 3.2 4.2
Free Cash Flow margin5 21.4 19.5 15.5 16.4 16.3 17.1 19.5 22.2 18.5 13.2
Corporate tax rate 33.0 32.4 33.7 32.0 31.2 31.7 31.0 32.7 34.0 35.4
WACC6 4.05 4.13 4.35 5.12 5.1 5.7 6.8 5.5 6.8 8.4
Equity ratio 61.2 60.1 54.8 48.4 59.8 56.6 48.1 39.1 51.8 47.2
DSO (Days Sales Outstanding) 113 111 115 107 105 93 100 109 120 119
Capex (€m) €16.7 €15.5 €10.5 €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8
Capital Employed7 (€m) €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
© 2017 Software AG. All rights reserved.
IN % OF REVENUE
6. Pro forma, not applied for corporate management
7. Fixed assets + Working capital
73 |
Product Revenue
Digital Business Platform
Product Revenue
Adabas & Natural
Operating Margin Group
(non-IFRS)2)
FY 2016 (in €m)
OUTLOOK
© 2017 Software AG. All rights reserved.
FULL YEAR 2017
1) At constant currency rates
2) Adjusted for non-operating items (see non-IFRS earnings results)
FY 2017 Outlook (as of July 17, 2017)
233.9
441.4
31.2% 31.0% to 32.0%
-2% to -6%1)
+5% to +10%1)
74 |
KEY REVENUE METRICS H1 YOY
© 2017 Software AG. All rights reserved.
€m
70.6
124.4
195.0
38.0
77.6
116.0
74.1
135.6
209.7
21.1
78.9
100.3
00
50
100
150
200
250
DBP License DBP Maintenance DBP Product A&N License A&N Maintenance A&N Product
H1 2016
H1 2017
75 |
KEY EARNINGS METRICS Q2 YOY
© 2017 Software AG. All rights reserved.
28.5%
9.3%
27.4%
29.4%
13.9%
29.5%
5%
10%
15%
20%
25%
30%
35%
SegmentDBP
SegmentConsulting
EBITA (Non-IFRS) in% of Group Revenue
Q2 2016 Q2 2017
Operating Margin Earnings (IFRS)
37.0
43.3 42.0
48.1
10
15
20
25
30
35
40
45
50
55
EPS (€ cent) EBIT (€m)
Q2 2016 Q2 2017
76 |
CURRENCY IMPACT ON REVENUE
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 MONTHS)
Euro 34%
US Dollar 30%
Other 10%
ILS 5%
BRL 5%
ZAR 4%
GBP 6%
(in €m; yoy)
Q2
2017
Q2
in %
YTD
2017
YTD
in %
Licenses 0.3 1% 1.9 2%
Maintenance 1.9 2% 5.8 3%
Consulting & Other 0.7 1% 1.3 1%
Total 2.9 1% 9.0 2%
Currency impact on revenue
34% revenue in Euro
66% revenue in foreign currency
Currency split YTD 2017
AUD 3%
CAD 3%
77 |
(in €m) Q2
2017
Q2
2016
∆% ∆%
acc
YTD
2017
YTD
2016
∆% ∆%
acc
Product revenue 156.3 152.7 2% 1% 309.8 310.6 0% -3%
Licenses 48.9 49.6 -1% -2% 95.2 108.6 -12% -14%
Maintenance 107.4 103.1 4% 2% 214.6 202.0 6% 3%
Consulting 50.6 50.4 0% -1% 102.7 98.3 4% 3%
Other 0.5 0.3 - - 0.8 0.7 - -
Total 207.4 203.4 2% 1% 413.3 409.6 1% -1%
REVENUE
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 MONTHS)
78 |
DIGITAL BUSINESS PLATFORM SEGMENT REPORT Q2 2017 / YTD 2017 (6 MONTHS)
(in €m) Q2
2017
Q2
2016
∆% ∆%
acc
YTD
2017
YTD
2016
∆% ∆%
acc
Licenses 35.7 38.0 -6% -7% 74.1 70.6 5% 3%
Maintenance 68.4 62.5 9% 8% 135.6 124.4 9% 7%
Total revenue 104.1 100.5 4% 3% 209.7 195.0 8% 6%
Cost of sales -6.7 -7.1 -6% -4% -13.8 -15.3 -10% -10%
Gross profit 97.4 93.4 4% 3% 195.9 179.7 9% 7%
Sales & Marketing -41.8 -43.1 -3% -4% -86.7 -83.5 4% 2%
Research & Development -25.0 -21.7 15% 11% -48.6 -43.9 11% 7%
Segment result 30.6 28.6 7% 8% 60.6 52.3 16% 15%
Margin in % 29.4% 28.5% 28.9% 26.8%
© 2017 Software AG. All rights reserved.
79 |
ADABAS & NATURAL
© 2017 Software AG. All rights reserved.
SEGMENT REPORT Q2 2017 / YTD 2017 (6 MONTHS)
(in €m) Q2
2017
Q2
2016
∆% ∆%
acc
YTD
2017
YTD
2016
∆% ∆%
acc
Licenses 13.2 11.6 14% 13% 21.1 38.0 -44% -46%
Maintenance 39.0 40.6 -4% -7% 78.9 77.6 2% -3%
Product revenue 52.2 52.2 0% -3% 100.0 115.6 -13% -17%
Other 0.1 0.1 - - 0.3 0.4 - -
Total revenue 52.3 52.3 0% -3% 100.3 116.0 -14% -17%
Cost of sales -1.9 -3.0 -37% -32% -4.8 -6.2 -23% -22%
Gross profit 50.4 49.3 2% -1% 95.5 109.8 -13% -17%
Sales & Marketing -8.0 -8.7 -8% -8% -16.1 -19.0 -15% -17%
Research & Development -6.0 -5.6 7% 3% -12.0 -11.0 9% 7%
Segment result 36.4 35.0 4% 0% 67.4 79.8 -16% -20%
Margin in % 69.6% 66.9% 67.2% 68.8%
80 |
CONSULTING
© 2017 Software AG. All rights reserved.
SEGMENT REPORT Q2 2017 / YTD 2017 (6 MONTHS)
(in €m) Q2
2017
Q2
2016
∆% ∆%
acc
YTD
2017
YTD
2016
∆% ∆%
acc
Total revenue 50.9 50.5 1% 0% 103.2 98.6 5% 3%
Cost of sales -38.9 -41.6 -6% -8% -80.8 -83.4 -3% -5%
Gross profit 12.0 8.9 35% 35% 22.4 15.2 47% 48%
Sales & Marketing -4.9 -4.2 17% 16% -9.9 -8.6 15% 14%
Segment result 7.1 4.7 51% 52% 12.5 6.6 89% 92%
Margin in % 13.9% 9.3% 12.1% 6.7%
81 |
RESULTS
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 MONTHS)
(in €m) Q2
2017
Q2
2016
∆% ∆%
acc
YTD
2017
YTD
2016
∆% ∆%
acc
Total revenue 207.4 203.4 2% 1% 413.3 409.6 1% -1%
Cost of sales -51.6 -54.5 -5% -6% -106.6 -110.5 -4% -5%
Gross profit 155.8 148.9 5% 3% 306.7 299.1 3% 0%
Margin in % 75.1% 73.2% 74.2% 73.0%
Research &
Development -30.9 -27.4 13% 12% -60.7 -54.9 11% 10%
Sales & Marketing -59.3 -60.4 -2% -3% -121.7 -120.0 1% 0%
Administration -19.5 -19.1 2% 1% -38.0 -38.3 -1% -2%
Other income / expense 2.0 1.3 - - 3.3 2.8 - -
EBIT 48.1 43.3 11% - 89.6 88.7 1% -
Margin in % 23.2% 21.3% 21.7% 21.7%
82 |
EARNINGS
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 MONTHS)
* Weighted average shares outstanding (basic) Q2 2017: 74.8m / Q2 2016: 76.2m / 6m 2017: 75.3m / 6m 2016: 76.2m
(in €m) Q2
2017
Q2
2016 ∆%
YTD
2017
YTD
2016
∆%
EBIT (before all taxes) 48.1 43.3 11% 89.6 88.7 1%
Financial result 0.2 -0.1 - 0.0 -0.6 -
Profit before taxes 48.3 43.2 12% 89.6 88.1 2%
Other taxes -1.8 -1.5 20% -3.7 -2.9 28%
Income taxes -15.2 -13.5 13% -27.3 -27.6 -1%
Tax rate in % 35.2% 34.7% 34.6% 34.6%
Net income 31.3 28.2 11% 58.6 57.6 2%
EPS in €* 0.42 0.37 14% 0.78 0.75 4%
83 |
NON-IFRS EARNINGS
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 MONTHS)
* Weighted average shares outstanding (basic) Q2 2017: 74.8m / Q2 2016: 76.2m / 6m 2017: 75.3m / 6m 2016: 76.2m
(in €m) Q2
2017
Q2
2016
YTD
2017
YTD
2016
EBIT (before all taxes) 48.1 43.3 89.6 88.7
Amortization on acquisition related intangible assets 8.5 7.2 16.3 14.5
Share based payments 3.7 4.7 8.7 7.1
Restructuring / severances / legal case 0.7 0.2 2.3 4.2
Other impacts / impacts from M&A activities 0.3 0.4 0.7 0.5
EBITA (Non-IFRS) 61.3 55.8 117.6 115.0
in % of revenue (Non-IFRS) 29.5% 27.4% 28.4% 28.1%
Net income (Non-IFRS) 40.2 36.7 77.5 75.5
EPS in € (Non-IFRS)* 0.54 0.48 1.03 0.99
84 |
Q1
2017
FY
2017*
Amortization
(in €m)
Depreciation
* Estimated
FY
2018*
AMORTIZATION / DEPRECIATION IMPACT
© 2017 Software AG. All rights reserved
(PRELIMINARY)
32.1
11.6
7.8
2.9
22.2
11.6
FY
2019*
19.9
11.6
Q2
2017
Q1
2017
7.8
2.9
8.5
2.9
85 |
CASH FLOW
© 2017 Software AG. All rights reserved.
Q2 2017 / YTD 2017 (6 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) Q2 2017: 74.8m / Q2 2016: 76.2m / 6m 2017: 75.3m / 6m 2016: 76.2m
(in €m) Q2
2017
Q2
2016 ∆%
YTD
2017
YTD
2016
∆%
Operating cash flow 46.6 58.4 -20% 108.4 120.3 -10%
./. CapEx* -4.1 -4.6 -22.6 -6.0
Free cash flow 42.5 53.8 -21% 85.8 114.3 -25%
in % of revenue 20.5% 26.5% 20.8% 27.9%
Free cash flow per share*** 0.57€ 0.71€ -20% 1.14€ 1.50€ -24%
**
86 |
June 30,
2017
June 30,
2017
Assets Liabilities
BALANCE SHEET
© 2017 Software AG. All rights reserved.
(in €m)
Dec. 31,
2016
Dec. 31,
2016
374.6
305.9
55.7
1,161.6
1,957.2
Cash and cash equivalents
Financial assets
Trade and other receivables
Fixed assets
(Goodwill 940.5/ 936.6)
Total
59.4
Non-financial assets
301.5
327.0
133.1
1,195.6
1,957.2
Financial liabilities
Other liabilities
Deferred income
Shareholders’ equity
(ratio 58.7% / 61.1%)
Total
303.8
235.2 68.5
1,165.9
1,833.5
60.3
308.5
285.3
163.2
1,076.5
1,833.5
87 |
HEADCOUNT BY FUNCTIONAL AREAS* AND GEOGRAPHY
© 2017 Software AG. All rights reserved.
25% 1,158 (+4%)
20% 888 (+5%)
13% 604 (0%)
42% 1,920 (0%)
Research &Development
Sales &Marketing
Administration
Consulting &Services
26% 1,183 (+3%)
17% 785 (+2%)
13% 597 (-1%)
44% 2,005 (+3%)
Germany
India
USA
Rest of World
* According to P+L structure as of June 30, 2017
Total: 4,570 (FTE)
88 | © 2017 Software AG. All rights reserved.
8. SHARES & OWNERSHIP
89 |
33%
36%
28%
3%
SHAREHOLDER STRUCTURE
© 2017 Software AG. All rights reserved.
35%
30%
13%
12%
Number of total shares: 76,400,000
Free float: ~ 64%
Indices: TecDAX, DAX 100, TechAllShare
Codes: SOW, SOW GR, SOWG.DE
ISIN: DE0003304002, ADR symbol: STWRY
Germany
United States
France & Benelux 6%
Scandinavia
United Kingdom
Rest of World 2%
Shareholder Structure
Share Data
Shareholder (disclosed)* by Region
Major Shareholders
Switzerland 2%
1) according to notification of voting rights
* Source: IPREO, July 2017
Software AG
Foundation
Disclosed
Shareholders*
Undisclosed
Shareholders
Own Shares
Software AG Foundation 32.67% 14.03.2017
Deutsche Asset Mgt. Investment 5.01% 05.07.20161)
Software AG (own shares) 3.19% 30.06.2017
90 |
0.30* 0.33* 0.37* 0.38*
0.43* 0.46 0.46 0.46
0.50 0.55
0.60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
DIVIDEND POLICY
© 2017 Software AG. All rights reserved.
FOCUS ON CONTINUITY
Dividend by fiscal year
(in € per share)
* According to the 1:3 stock split, rounded
91 |
DIVIDEND YIELD EXCEEDING GOVERNMENT BONDS
© 2017 Software AG. All rights reserved.
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
2010 2011 2012 2013 2014 2015 2016
Dividend yield Software AG German Government Bonds (5 years) Yield spread
92 |
CASH USE:
© 2017 Software AG. All rights reserved.
SHARE BUY-BACK 2013-17
Buy-back own shares
2013 - 2014
Cancellation of
treasury shares
April 30, 2015
Buy-back own
shares 2015
Sept. 8, 2015 -
Dec. 4, 2015
Until cancellation / capital reduction:
Share capital: 86,943,945.00 €
Number of shares: 86,943,945
€m 225
9.2%
€m 70
3.4%
- 9.1%
-3.29%
Until cancellation / capital reduction:
Share capital: 79,000,000.00 €
Number of shares: 79,000,000
Cancellation of
treasury shares
March 14, 2017
Buy-back own
shares 2017
March 13, 2017 -
May 11, 2017
3.266%
Own shares
Position after
cancellation
March 15, 2017
Since cancellation / capital reduction:
Share capital: 76,400,000.00 €
Number of shares: 76,400,000
0.38%
93 |
0
50
100
150
200
250
2012 2013 2013 2014 2014 2015 2015 2016 2016 2017*
Free Cash Flow
Share Buy-Back +Dividends
CASH RETURN TO SHAREHOLDERS
© 2017 Software AG. All rights reserved.
Ø ¾ FREE CASH FLOW TURNS INTO DIVIDENDS AND SBB
€m
94 |
SOFTWARE AG FOUNDATION
© 2017 Software AG. All rights reserved.
ANCHOR SHAREHOLDER
The Software AG Foundation is one of Germany’s ten largest foundations
(capital stock € 1bn+, Software AG shares and other assets)
Founded by Dr. hc. Peter M. Schnell in 1992
Disburses financial support amounting to approx. € 30 million annually
Principle of a “self-help grant” (supports nonprofit organizations)
The Foundation focuses on many different projects in areas including:
• science and research, environment
• support for the elderly and disabled, support for children and young people
• education and training
95 |
ANALYST COVERAGE
© 2017 Software AG. All rights reserved.
Baader Helvea E.R.
Barclays Capital
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 Seydler
Société Générale
UBS I.R.
Warburg Research
For latest consensus of analysts‘ financial estimates visit our
IR website on: www.softwareag.com
Banks / Broker who cover Software AG on a regular base
96 |
INVESTOR RELATIONS
© 2017 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]
97 | © 2017 Software AG. All rights reserved.