cloud & iot the new growth drivers - software ag/media/files/s/... · 2018-09-19 · product...

Eric Duffaut

CCO

Kepler Chevreux Roadshow

Paris, 19 September 2018

THE NEW GROWTH DRIVERS

© 2018 Software AG. All rights reserved

CLOUD & IOT

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

3 |

SOFTWARE AG AT A GLANCE


Technology leader for more than 40 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%

41%

Americas

51%

EMEA

REVENUE

51%

DBP

26%

A&N

23%

Services

BY REGION* BY BUSINESS LINES*

* Based on Group product revenue – FY 2017 **P&L as of December 31, 2017

4 |

BUSINESS LINES


*Group revenue split FY 2017

Share of

Revenue* 52%

Growing Revenue

• IoT and Industry 4.0 Platforms

• Integration & Automation

• Analytics & Decisions

• In-Memory Data

• Business & IT Transformation

Share of

Revenue*

Growing Stability

• Application Development

• Data Management System

• Modernization

• System Support 2050+

Share of

Revenue*

Growing Margin

• Strategy & Design

• Product Implementation &

Customized Solutions

• Education & Cloud Services

• Global Delivery (on-/offshore)

25% 23%

5 |

DATA CENTERED ERA REQUIRES SOFTWARE CENTRICITY


Source: Morgan Stanley Research, The Data Era Becomes Investable, April 9, 2018

ENTERING THE NEXT COMPUTING CYCLE – WHICH IS CENTERED ON DATA…

Source: Bain & Company, 2017

Software AG is ready to reap proceeds from higher

IT investments by providing a comprehensive

workbench along the IT value chain.

Software AG has singled out a distinct area of growth

in (industrial) IoT to leverage its capabilities.

6 |

SOFTWARE AG IOT PLATFORM CAPABILITES ACQUISITIONS TO CATER THE IOT NEEDS

2011 2013 2016


2017

Big Data &

Streaming

Analytics

Machine

Learning

Edge

Computing

Device

Connectivity

IoT Acquisitions

2010 2018

Strategic

decision

for IoT

Artificial

Intelligence

Time-series

Analytics

7 |

SOFTWARE AG MAIN ACQUISITIONS FOR IOT


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

• 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)

IoT PaaS – End-to-End Cloud Platform

8 |

ESSENTIAL CAPABILITIES TO SUCCEED IN IOT


IOT

Artificial

Intelligence

Time-Series

Analytics

9 |

DIGITAL BUSINESS PLATFORM (DBP) & IOT EVOLUTION


CREATING NEW DIGITAL BUSINESS IN REAL TIME ECONOMY

Build new digital business models (algorithms)

I oT

Connect device &

production process data

DBP

Connect

business data & logic

Create new digital enterprise

Apply real-time analytics

10 |

DIGITAL BUSINESS PLATFORM & IOT GTM / DISTRIBUTION CHANNELS

Direct

Cloud

OEM

Project based Product

Sales and Upgrades

Standardized / Use Case

Product Offerings

(e.g. ARIS & Alfabet)

Sales Scale with Partner

Platform or Solution


11 |

CUSTOMER BASE IS MATCHING IOT GROWTH SECTORS


20%

19%

18%

12%

10%

4% 5%

12%

Government Financial Services

IT Services Manufacturing

Services Telco & Media

Transp. & Log. Other

Software AG Customer by Sector

(Product Revenue 2017) IoT Demand by Sector (2015-2020)

12 |

Strengthening Mindsphere platform across industries

enabling powerful industry applications

SOFTWARE AG’S SUCCESS STORIES IN IOT IOT ECOSYSTEMS – INDUSTRIE 4.0, TELCOS, AUTOMOTIVE, …

JV of leading machinery manufacturers:

DMG MORI, DUERR, ZEISS, ASM, ENGEL,

KARL MAYER

Leveraging Bosch IoT Cloud platform with

real-time predictive analytics technology

Enabling customers to use geo-sensing alerts,

reduce theft and anticipate maintenance needs

KPN (NL), Telstra (AUS), Telia (SWE),

Reliance Communications (India), NTT (Japan),

Deutsche Telekom (T-Systems), Nokia / Huawei

Transforming auto insurance through behavioral,

contextual and driving analytics

© 2018 Software AG. All rights reserved

13 |

SOFTWARE AG’S OPEN IoT ECOSYSTEM OVERVIEW

Consortia &

Alliances

Infrastructure &

Connectivity

System

Integrator

Hardware &

Devices Technology

& Analytics

Value-added

reseller


14 |

ADDITIONAL INFORMATION

•ACQUISITIONS AND INNOVATION

•FINANCIAL PERFORMANCE

•SHAREHOLDER STRUCTURE


15 | © 2018 Software AG. All rights reserved.

SELF-SERVICE ANALYTICS FOR TIME-SERIES DATA SOFTWARE AG ACQUIRED

Helping Global

Manufacturing Companies

Improve their Plant

Availability, Production

Quality, and Overall

Asset Effectiveness

Through self-service

Search, Diagnostic and

Predictive Analytics

using Pattern

Recognition and

Machine Learning

Technology.

Enriches Cumulocity IoT

• Self-service tooling for

Domain Experts, not Data

Scientists

• Fits well into Land & Expand

model and SaaS approach

Strong customer base in

Process Industry

• Continuous and Batch

Processes in Chemical, Oil &

Gas, Energy & Utilities and

Pharma

• Joint opportunity to broaden

usage towards Discrete

Manufacturing

Analyze

Monitor

Predict

16 |

*At constant currency

** at internal FX plan rate 2018

in €m, IFRS H1 2018 H1 2017 Δ FY 2017 FY 2016 Δ

Total Revenue 392.3 413.3 1%* 879.0 871.8 2%*

BL DBP (including Cloud & IoT) 202.9 210.3 3%* 456.4 441.4 5%*

Thereof Cloud & IoT 11.6 6.4 88%* 14.9 N/A N/A

BL A&N 97.3 100.3 4%* 223.7 234.6 -4%*

BL Consulting 92.1 102.7 -7%* 198.8 195.8 2%*

Annual Recurring Revenue (Cloud & IoT) 24.8 12.2 106%* 14.8** N/A N/A

EBIT 94.3 89.6 5% 222.8 213.9 4%

EBITA (non-IFRS) 112.7 117.6 -4% 279.5 272.0 3%

EPS (in €, non-IFRS) 1.06 1.03 3% 2.38 2.37 0%

Dividend per share €0.65 €0.60 8%

Free cash flow 88.6 85.8 3% 161.9 187.0 -13%

Operating Margin Group (EBITA non-IFRS) 28.7% 28.4% 30bps 31.8% 31.2% 60bps

Shareholders’ equity ratio 59.4% 58.7% 70bps 58.6% 61.1% -250bps

FINANCIAL DATA KEY FIGURES


17 |

+27%**

0

5

10

15

20

25

30

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

€m

Subscription License

Maintenance

SaaS

DBP CLOUD & IOT DEVELOPMENT ARR – ANNUAL RECURRING REVENUE (STATUS JUNE 30, 2018)


ARR = Total Conctract

Value (TCV) of active

contracts at period end

divided by contract

duration in months,

times 12.

*Net of currency (based on prior year rates)

**vs. previous quarter status

18 |

DBP Total Revenue

Adabas & Natural

Operating Margin Group

(EBITA non-IFRS)2)

OUTLOOK


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 / H1 2018: 74.0m; based on new US-Federal-Tax and Euro/US-Dollar exchange rate of 1/1.18

- DBP Cloud & IoT

- DBP (excl. Cloud & IoT)

EPS non-IFRS3)

FY 2018 Outlook (as of April 13, 2018)

30% to 32%

-6% to -2%1)

N/A

FY 2017 (in €m)

223.7

456.4

31.8%

14.9 +100% to +135%1)

+3% to +7%1) 441.5

+5% to +15% €2.38

19 |

2018 TURNING POINT / DIGITAL BUSINESS DRIVING GROWTH


0%

20%

40%

60%

80%

100%

2010

License Revenue

0%

20%

40%

60%

80%

100% Maintenance Revenue

2012

0%

20%

40%

60%

80%

100% Segment Result

Digital Business Platform

Adabas & Natural

2018e

20 |

according to notification of voting rights above 3% threshold of shares outstanding

Deutsche Asset Mgmt. Investment 4.91% Oct 20, 2017

Axxion S.A. 3.30% Apr 13, 2018

BlackRock, Inc 3.05% May 24, 2018

Germany

North America

Continental Europe(excl. Germany)

UK & Ireland

Rest of World

38.4%

23.1%

19.1%

18.9%

SHAREHOLDER STRUCTURE


33.7% 61.3%

Software AGFoundation

Own Shares(0.03%)

InstitutionalInvestors

Private Investors

Number of total shares: 74,000,000

Thereof Free Float: ~ 66%

Number of shares outstanding: ~ 74m

Registered shares since Oct 2, 2017

Share Data Major Institutional Shareholders Share Info

SOW, SOW:GR, SOWGn.DE

ISIN: DE000A2GS401

ADR symbol: STWRY

Indices: TecDAX, (MDAX), TechAllShare

OWNERSHIP REGIONAL SPLIT*

*Institutional Investors based

on public files, Aug 2018

21 |

Investor Relations

Uhlandstrasse 12

64297 Darmstadt

Germany

T: +49 (0) 6151 / 92 1900

F: +49 (0) 6151 / 9234 1900

W: softwareag.com

E: [email protected]


mailto:[email protected]

cloud & iot the new growth drivers - software ag/media/files/s/... · 2018-09-19 · product...

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