Software AG Investor Presentation

Transcription

1 Software AG Investor Presentation May

2 Safe-Harbor-Statement This presentation contains forward-looking statements based on beliefs of Software AG management. Such statements reflect current views of Software AG with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected here, due to factors including changes in general economic and business conditions, changes in currency exchange, the introduction of competing products, lack of market acceptance of new products, services or technologies and changes in business strategy. Software AG does not intend or assume any obligation to update these forward-looking statements. 2

3 Software AG - At a Glance Technology leader in system integration, process automation and data management ~ 1bn revenue (FY 2013) ~ 27% operating EBIT margin (FY 2013) ~ 16% free cash flow margin (FY 2013) > 5,000 Employees worldwide ~ 1,000 R&D > 2bn market cap > 60% free float ~ 29% Software AG Foundation Middleware to integrate data, applications and digital workflows Intelligent Business Operations and Big Data High performance data management Process planning, monitoring and analysis 70 Countries Global customer base: 80% of Fortune 10,000 3

4 Business Lines & Development BPE Business Process Excellence ETS Enterprise Transaction Systems Consulting IT PORTFOLIO MANAGEMENT COLLABORATIVE PROCESS ANALYSIS DATABASE MANAGEMENT SYSTEMS ENABLER FOR OWN PRODUCT SALES (BPE/ETS) PROCESS AUTOMATION AND INTEGRATION REAL-TIME INTELLIGENCE AND BIG DATA Product revenue: growth 10-20% p.a. (incl. a 50% growth from Big Data/IBO) >50% contribution to group result, mid-term Transform technology leadership into market leadership Increase to >80% of product revenue ( 1bn) APPLICATION DEVELOPMENT & MODERNIZATION Manage cash cow Adjust cost to maintain segment margin > 60% SAP CONSULTING (DISPOSAL IN Q2 2014) Successful Turnaround Focus on Integration and Business Solutions Margin expansion S H A R E O F R E V E N U E * 44% 28% 28% *based on revenue 2013: 973m 4

5 Maintenance High Level of Recurring Revenue and Profits m * ETS BPE > 90% of Maintenance Revenue is recurring *currency impact: 16m 5

6 Free Cash Flow and Dividend per Share EUR FCF per Share Div per Share 6

7 Transforming Software AG Prime Operational Targets 2014 Product Revenue BPE Business Process Excellence 60 % Dynamic Growth Increase sales efficiency 2013 hires Utilize full market potential Close strategic - 7/8-digit deals Broaden customer base ETS Enterprise Transaction Systems 40 % Preserve customer base Minimize decline Protect maintenance base Utilize customer access for driving strategic projects (ETS and BPE) 7

8 License Revenue Dynamic Growth in BPE Business m * ETS /Other BPE BPE License with sustainable growth *currency impact: 17m 8

9 The Impact of Differentiating Solutions by Software AG Refreshments Average annual benefit of several million 98% reduction in transfer time for assets 10s of millions increase in profit Employees and contractors now emergency-prepared Supply chain transformation in days 10x higher response rate to marketing campaigns 9

10 BPE License growth e compared to market peers Growth yoy acc 20% 15% Peer group average 10% 5% 0% e* * Based on analyst estimates (May 2014) 10

11 Turning Technology Leadership into Market Leadership: Build Multi Channel Ecosystem and Integrated Portfolio Suite Multiple Sales Channels OEM s/isv s Growth Suite SI s Growth acceleration + 50 m S +M Investment LongJump Alfabet, ARIS Cloud Suite & on-premise Apama Single Sales Channel Aris/web- Methods Terracotta Mychannels JackBe Business Process Platform Big Data/IBO Platform webmethods Integration Platform Products 11

12 Revenue Targets (BPE + ETS) Product Revenue 1 Billion 20% 60% >80% New Products (BPE+) Organic Growth Integration Technology Business Process Mgt. IBO / Big Data Cloud / Partner / OEM M&A/Innovative Technologies 80% % Enterprise Transaction <20% Systems (ETS)

13 Revenue and Margin Drivers 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) Sales productivity Channel sales Metrics

14 Outlook FY 2014 FY 2013 (in m) Outlook FY 2014 (as of Jan. 28, 2014) Q ( in %) Product Revenue BPE % to +18%* 11%* Product Revenue ETS % to -16%* -15%* Operating Result (Non-IFRS)** % to +7% -7% * Revenue growth or decline at constant currency ** EBITA before adjustments for non-operating items (see non-ifrs earnings results) 14

15 Key Investment Indicators 1. Footprint: Established global software player with blue chip customer base 2. USP: Unique technology leadership in fast growing IT segments 3. Financials: Strong balance sheet and cash generation (dividend) 4. Assets: Experienced management team and loyal expert staff 5. Timing: Post ramp-up investments for mid-term growth / leverage ahead 15

16 Appendix Portfolio, Market Position & Competition

17 Enabler of the Digital Enterprise Analytics Visualization Process Automation Integration Middleware In-Memory Big Data/IBO Internet 4.0 Application Silos HW Infrastructure APPS SEARCH EVENT MGMT. RULES ESB / SOA-GOV. DATA MGMT. COLLABORATION REAL-TIME DATA ERP CRM, HR ADABAS ETC. IT 3.0 IT

18 Software AG Agility Platform Dashboards Real-Time Insight Proactive Alerts Mobile Anywhere I N T E L L I G E N T B U S I N E S S O P E R AT I O N S Event Processing Process Mining Historic KPI's Activity Monitoring Data Analytics COLLABORATIVE PROCESS ANALYSIS PORTFOLIO MANAGEMENT Business Process Analysis Governance, Risk & Compliance IT Portfolio Management Enterprise Architecture P R O C E S S A U TO M AT I O N / I N T E G R AT I O N Process Automation Application Integration B2B Integration SOA Governance Composite Applications B I G D ATA a n d I N - M E M O RY D ATA M A N A G E M E N T Custom ERP CRM 18

19 Agile Integration & Automation IBO Platform for the Smart Digital Enterprise MOBILE CLOUD Business Process Management Agile Apps Dashboards & Visualization Proactive Alerts Intelligent Actions Real-time Decisions Historical Pattern Discovery Streaming Analytics Process Analytics Continuous Analytics In-Memory Data Management & Connectivity $ Financial & News Events Sensor & machines Mobile events Social Media Hadoop Business Intelligence Business Processes BIG DATA SOCIAL 19

20 Organic Growth sparked by Innovations Visualization (Presto) Dashboards Real-Time Insight Intelligent Business Operations Event Processing Event Processing Application Development Collaborative Process Analysis / Management Enterprise Architecture IT Portfolio Management Messaging Integration / SOA In-memory Data Management In Memory Computing 20

21 Agile Integration & Automation IBO Platform Components MOBILE CLOUD Business Process Management Agile Apps PPM Optimize Dashboards & Visualization Proactive Alerts Presto Real-time Decisions Intelligent Actions Historical Pattern Discovery Streaming Analytics Apama Real-time Complex Pattern Detection Streaming Analytics Terracotta Big Memory & Universal Messaging In-Memory Data Management & Connectivity $ Financial & News Events Sensor & machines Mobile events Social Media Hadoop Business Intelligence Business Processes BIG DATA SOCIAL 21

22 The need: supporting a new class of streaming, decision-centric application requirements The Internet of Things Industrial Internet Location Sensing Fast, Big Data Complexity of Extra-Enterprise information Wearable Devices Mobility Social Media Smart decisions Supply Chain Logistics CRM/CXM Risk Mgmt Fraud Trading Internet Streaming Time window to analyze & act Seize Software AG. All opportunities rights reserved. & avoid crises amidst explosive complexity

23 Need to Complement Batch-based Analytics with Continuous & Actionable Real-time Analytics Traditional BI Statistical Analytics Data Mining Other off-line Analytics Predictive Analytics Hadoop Periodic Reports Data Mart/ Warehouse Continuous Streaming Analytics Ad Hoc BI Analytics Offline Business Intelligence Store data at rest Capture Big Data in motion Take Action (Operational Decisions) Strategic and Tactical decisions Run-the-business Operational Systems Intelligent Business Operations Platform 23

24 Real-time Personalization Real-time Promotions Omni-Channel Fulfillment Retail Bank Process Monitoring SAP Process Monitoring Rating Process Monitoring Faster ecommerce Mainframe Offload Database Offload ATM Fraud Detection Anti-money Laundering Smart Grid Analytics Energy Theft Detection M2M Process Optimization Market Surveillance Rogue Trader Monitoring Pre-trade Risk FX ecommerce Algorithmic Trading Bond Pricing IBO Solution Blueprints & Customers Customer Experience Management End-to-End Process Assurance Business Acceleration Real time Fraud Prevention M2M Operational Intelligence Risk & Compliance Monitoring etrading IBO Solution Blueprints IBO Platform 24 Common Use Case Patterns and Solution Accelerators

25 Example: Smart Shipping Logistics Convey data reliably from the remote ships & dock side machines Real-time tracking of all entities, highlighting efficiencies and predicted problems Real-time and historic/enriched information on ships Ship Movements (Sat) Ship reporting Port Messages Detect a ship passing a certain area, determine the relevance Start appropriate process Real-time access to ships inventories and planning schedules 25

26 Example: Avoid Regulatory Fines & Resolve Suspiciou Trading Activity Proactively Compliance staff visualize trade abuse alerts; drill in to investigate Trades Quotes News Trader Behavior Social Media Unusual trading activity just before news release suggests insider trading Notify relevant Compliance Officer 26

27 Example: Intelligent Mobile Marketing Offers Real-time, One-to-One Marketing Customer location detected entering Mall Enjoy 15% discount off any main meal at Sports Bar Diner in Wellington Mall this lunchtime Customer who likes Sports enters a Mall Partner Sports Bar Diner has capacity Push offer of 15% off any main meal this lunchtime if you pay with DBS credit card 27

28 Large Enterprise / Public Sector Customers in 70 Countries Finance Public Sector Chemicals/Pharma Energy/Utilities Telecom Manufacturing Logistics/ Transport Healthcare/ Consumer Goods 28

29 Revenue Split Well Balanced Product Revenue by Region* Product Revenue by Industry* 17% 8% 38% 22% 19% 36% Americas Germany EMEA Asia Pacific Public Sector Financial Sector IT Services Associations Manufacturing Telcos Logistics Retail Energy Other *Based on group revenue FY

30 Software AG Suite is a Top-Ranked Technology Leader Application Integration Suites Application Services Governance Business Process Analysis Tools Business Process Management Suites Enterprise Architecture Tools Governance, Risk and Compliance Integrated IT Portfolio Analysis Apps Complex Event Processing Platforms Comprehensive Integration Solutions EA Management Suites Elastic Caching Platforms ESB Integrated SOA Governance SOA Service Life-Cycle Management 30

31 Enterprise Digitization Driving growth of AIM Market 2.9bn 5.1bn 1.2bn 1.7bn 21% CAGR 2.1bn 3.0bn Modern ESB Modern BPMS Modern ESB Modern BPMS Tradit. ESB 1.5bn SOA, B2B & other 1.6bn Tradit. BPMS 1.1bn Tradit. ESB 1.3bn SOA, B2B & other 2.1bn 0.6bn Tradit. BPMS Addressable AIM Market Segments= $7.1bn 9% CAGR Addressable AIM Market Segments = $9.2bn 31

32 Market Share in Main Markets: BPSM (Process Management) and ESB (Integration) Business Process Management Suite (BPMS) Enterprise Service Bus Suite (ESB) Appian 3% OpenText 4% Software AG 7% Tibco 3% Others 36% Others IBM 15% 29% Tibco 9% Oracle 8% Pegasystems 10% IBM 29% Software AG 11% Microsoft 13% Oracle 23% Source: Source: Gartner: Market Share, All Software Markets, Worldwide, 2013, Colleen Graham et al, 28 March

33 Appendix Financials

34 Currency impact on revenue Q / FY 2013 Currency split FY 2013 Currency impact on revenue ZAR 2% CAD 3% ILS 4% AUD 5% GBP 6% BRL 8% Other 10% US Dollar 26% Euro 36% (in m; yoy) Q Q1 in % FY 2013 FY in % Licenses % % Maintenance % % Consulting & Other % % Total % % Split EUR/USD: FY 2013: EUR 36%, USD 26% Q1 2014: EUR 43%, USD 21% 34

35 Group Revenue Q / FY 2013 (in m) Q Q Δ% Δ% acc FY 2013 FY 2012 Δ% Δ% acc Product % -1% % 4% Licenses % -4% % 9% Maintenance % -2% % - Consulting & services % -8% % -19% Other % -33% Total % -3% , % -4% Excluding IDS (proforma) % 0% n.a. n.a. n.a. 35

36 Segment report Q / FY 2013 Business Process Excellence (BPE) (in m) Q Q Δ% Δ% acc FY 2013 FY 2012 Δ% Δ% acc Licenses % 10% % 18% Maintenance % 11% % 11% Total revenue % 11% % 15% Cost of sales % 2% % 23% Gross profit % 11% % 14% Sales & marketing % 11% % 53% R & D % 7% % 12% Segment result % 16% % -19% 36

37 Segment report Q / FY 2013 Enterprise Transaction Systems (ETS) (in m) Q Q Δ% Δ% acc FY 2013 FY 2012 Δ% Δ% acc Licenses % -30% % -6% Maintenance % -7% % -7% Product revenue % -15% % -7% Other Total revenue % -15% % -7% Cost of sales % -6% % -6% Gross profit % -15% % -7% Sales & marketing % -31% % -15% R&D % -4% % -3% Segment result % -11% % -5% 37

38 Segment report Q / FY 2013 Consulting (in m) Q Q Δ% Δ% acc FY 2013 FY 2012 Δ% Δ% acc Licenses % -86% % -9% Maintenance % -41% % 57% Product revenue % -52% % -49% Services & other % -8% % -19% thereof BPE/ETS % n.a. n.a. n.a. Total revenue % -9% % -20% Cost of sales % -12% % -26% Gross profit % 9% % 37% Sales & marketing % -22% % 3% Segment result >100% >100% 38

39 Results Q / FY 2013 (in m) Q Q Δ% FY 2013 FY 2012 Δ% Δ% acc 44 Total revenue % , % -4% Cost of sales % % -21% Gross profit % % 6% Margin in % 67.4% 66.3% 69.7% 63.9% R & D % % 8% Sales & marketing % % 26% Administration % % -2% Other income/expense EBIT (before all taxes) % % -10% 39

40 Operating Results (Non-IFRS) Q / FY 2013 (in m) Q Q FY 2013 FY 2012 EBIT (before all taxes) Amortization on acquisition related intangible assets EBITA Reduction acquisition related product revenue by purchase price allocation Other acquisition impacts Share based payment Restructuring/severances Operating Result (Non-IFRS) in % of revenue (Non-IFRS) 20.6% 21.7% 26.8% 28.5% NOPAT (Non-IFRS) EPS (Non-IFRS)* * Based on average outstanding shares: Q1 2014: 86.9m / Q4 2013: 82.2m / Q4 2012: 86.8m // FY 2013: 83.7m / FY 2012: 86.8m 40

41 Cash flow Q / FY 2013 (in m) Q Q Δ% FY 2013 FY 2012 Δ% Operating cash flow % %./. CapEx* Free cash flow % % as % of revenue 22.9% 27.9% 16.4% 16.3% Free cash flow per share** % % * Cash flow from investing activities except acquisitions and except investments in debt instruments ** Based on average outstanding shares: Q1 2014: 86.9m / Q4 2013: 82.2m / Q4 2012: 86.8m / FY 2013: 83.7m / FY 2012: 86.8m 41

42 Balance sheet (in m) Assets Liabilities March 31, 2014 Dec. 31, 2013 Dec. 31, 2012 March 31, 2014 Dec. 31, 2013 Dec. 31, Cash and cash equivalents/ Securities Trade receivables Inventory, other assets Financial liabilities Other liabilities Deferred income ,078.9 Fixed assets (goodwill 820.7/829.2) 1, , Shareholders equity (ratio 47.4%/48.4%) ,935.9 Total 1, , ,935.9 Total 1, ,

43 Earnings IFRS Q / FY 2013 (in m) Q Q Δ% FY 2013 FY 2012 Δ% EBIT (before all taxes) % % Financial result % % Profit before taxes % % Other taxes % % Income taxes % % Tax rate in % 32.6% 32.5% 32.0% 31.2% Net Income % % EPS in * % % * Weighted average shares outstanding (basic) Q1 2014: 86.9m / Q4 2013: 82.2m / Q4 2012: 86.8m / FY 2013: 83.7m / FY 2012: 86.8m 43

44 Amortization / depreciation impact 2014ff (preliminary) (in m) Q FY 2013 FY 2014 FY 2015ff* Amortization IDS Amortization other Depreciation * Estimated 44

45 Headcount by functional areas* and geography (in FTE) Mar.31, 2014 Dec.30, 2013 Δ% qoq Mar. 31, 2013 Δ% yoy Total 5,108 5,238-2% 5 5,300-4% Consulting & services 2,283 2,347-3% 2,456-7% R & D % Sales & marketing 1,131 1,180-4% 1,213-7% Administration % 730-4% USA % 729 3% Germany 1,663 1,711-3% 1,727-4% Rest of world 2,693 2,749-2% 2,844-5% * According to P+L structure 45

46 Shareholder Structure Shareholder Structure Major Institutional Investors 9% Software AG Foundation Fidelity (FMR LLC) 3.5% 25% 29% Institutional Investors Deutsche Asset & Wealth 3.3% Private & undisclosed Templeton 3.0% 37% Own Shares** **as of February, 2014 Alken 2.9% Deka 2.9% Institutional Investors by Region* Share Data Rest of World BeNeLux 12% 6% 30% Germany France 7% Scandinavia 8% 23% US 14% UK *Source: ThomsonOne, January Number of total shares: 86,943,945 Freefloat: ~ 62% Indices: TecDAX, DAX 100, TechAllShare Codes: SOW, SOW GR, SOWG.DE ISIN: DE ADR U.S. trading symbol: STWRY

47 Investor Relations Uhlandstrasse Darmstadt Germany phone: +49 (0) 6151 / fax: +49 (0) 6151 / softwareag.com [email protected] Follow us on