xbrl will turn regulatory burden into ir opportunity

XBRL will turn regulatory burden into IR opportunity

Otmar F. WinzigVice President Investor Relations, Software AG

Member of the Board of DIRK (German Investor Relations Association)Member of the CESR Consultative Working Group on Transparency

© Otmar F. Winzig, Software AG 2

Software AG Profile

Europe’s largest and most established systems software provider(since 1969)

Leader in XML technology (integration and database management)

Software AG provides a real-time single view of strategic business information by integrating applications and systems, in addition to modernizing mainframe and open system IT environments

Headquartered in Darmstadt, Germany; US headquarters in Reston, VA

2,500 employees / active in 59 countries / support mission-critical IT systems of 3,000 customers

> 500 mn. $ revenue

Market Cap ~1 bn. $ / Free Float: 68.4% / Frankfurt stock exchange (TecDax)


Software AG and XBRL (1)

Fully committed to XBRL since 2001

XBRL competence center in Madrid

Founding member of XBRL jurisdictions in D, NL, E, F, I, B

First company in reporting in IFRS using XBRL

First European portal “XBRL in action” with Ernst & Young Germany: www.xbrlrating.de. Rating portal for companies

First European “XBRL based Stock Exchange Portal” with German Stock Exchange Live at http://xbrl.deutsche-boerse.com



Digital Reporting Platform (DRP)Example live at http://xbrl.softwareag.es/drp

First XBRL based platform for Digital e-Reporting and e-Filing

Taxonomy management, validation and versioning

XBRL report management validation and analysis

Extensible XBRL framework for fast project implementation

Targets e-reports collection organizations such as regulators, banks,

stock exchanges and

others



Development of industry based Taxonomy for Credit Risk Assurance Companies by Software AG ICISA – FLIPA XBRL taxonomy for exchange of credit risk information

XBRL training at Software AG Institute Madrid

Development of taxonomies for Spanish companies e.g. Telefonica, Spanish Stock Exchange

Development leadership for COREP taxonomy for CEBS, Committee of European Banking Supervisors COmmon solvency ratio REPorting framework, for credit institutions and investment

firms under the future European Union capital requirements regime

Digital Reporting Platform as central XBRL repository for COREP users http://www.softwareag.es/drp


Regulatory Requirements European Transparency Directive 2004/2007 (1)

Frequency and Quality of Corporate Reporting

IAS / IFRS

Annual report / half-year reports Audited financial statements (full / condensed) Auditor’s report / review Management report Personal statements (European SOX!)

Interim Reports Q1 and Q3 Statement covering material events and transactions General description of the financial position

or quarterly financial reports


Regulatory Requirements European Transparency Directive 2004/2007 (2)

Dissemination and storage of corporate information

Dissemination models in place in different European member states today range from newspaper advertisements, web posting, central electronic filing and simultaneous electronic distribution. Push versus pull Relevance of newspapers

Storage models favor a kind of “European Edgar” or Commercial sector (linked) database(s)

Simultaneous distribution and European wide access to information relevant to shareholders


What IR officers should ask for(Position of German IR Association / DIRK)

One information gateway only to fulfill legal requirements

Dissemination and storage in one process

Common format and language

Comparable and viable data from sector / peer groups

Shareholder transparency

or simply

the (mandatory) use of XBRL


XBRL based IR Opportunities (1)

Today > 90% of the 10,000 companieslisted on European stock exchange are unknown to the global investorcommunity.

Even with outstanding results, theirsuccess on the capital market depends on singular sell-sideanalysts’ banks or broker firms.

XBRL needs no human interface(i.e. filter or barrier) to transformfinancial data into relevant and wide-spread information forinvestors.

7500

8000

8500

9000

9500

FTSE 100HDAX 110

CAC 40MIB 30

> 90%reduced visibility

9,360

Stock listedcompanies in Europe

Blo

om

be

rg 5

00

MS

CI

Eu

rop

e

56

5



Issuers / IROs Less dependent on individual opinions of sell-side analysts and other

opinion leaders Less vulnerable in respect to interest-driven market participants Easy benchmarking within peer group Accelerate and expand distribution of corporate information Increase visibility and awareness in the capital market



Financial Analysts Less manual spreadsheet data entry Ability to search and compare non-numeric information More time for in-depth analysis More companies to cover Faster reaction to new information

Investors Less dependent on analysts’ opinion and skills Spot outperforming companies immediately (pop-up) Receive analysis of financial data at the time of publishing Less cost for relevant information Better transparency within peer group


XBRL-Initiative of Deutsche Börse

First Pilot Project (2004)

Issuer provides quarterly reports (IFRS) to Exchange Reporting (ERS) System / Excel format according to template based on common simple taxonomy

Deutsche Börse Transform Excel into XBRL Manage XBRL database Offer analytic tools

Second Pilot Project (2005)

Issuer provides annual report (IFRS) to ERS / Excel or XBRL format standard / taxonomy can be amended by individual notes


XBRL-Initiative of Deutsche Börse

Increase of quality and consistency of data

Higher profitability and efficient production process

Easy to compare published information

Easy handling due to standardization and automation

Faster availability of data

Centralization of delivery and request of data

Easy access to relevant capital market data

Cost savings in preparation, production, distribution

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

Issu

ers

Inve

stor

s

Ana

lyst

s

Ser

vice

P

rovi

ders

XBRL offers a series of advantages to everybody interested in capital market data

Key arguments for the use of XBRL – and who benefits from it


Food for thought:Future design of financial reporting

1. Use future oriented technology Universal data format -- XBRL Individual selection of information by stakeholders

2. Redesign corporate reporting Tier One: Global GAAP Tier Two: Sector reporting standards Tier Three: Company specific information

3. Provide shareholder transparency Immediate disclosure of shareholdings Disclosure of lending and short selling


Contact details

Otmar F. Winzig

Vice President Investor Relations

Software AG

Uhlandstraße 12

D-64297 Darmstadt, Germany

Tel.: +49 (0) 6151 / 92-1669

Fax: +49 (0) 6151 / 92-1383

eMail: [email protected]

xbrl will turn regulatory burden into ir opportunity

Documents

european xbrl

software ag member

european portal xbrl

esdrpfirst xbrl

member of xbrl jurisdictions

central xbrl repository

xbrl competence center

database managementsoftware