cloud & iot the new growth drivers - software ag/media/files/s/... · 2018-09-19 · product...
TRANSCRIPT
Eric Duffaut
CCO
Kepler Chevreux Roadshow
Paris, 19 September 2018
THE NEW GROWTH DRIVERS
© 2018 Software AG. All rights reserved
CLOUD & IOT
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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
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SOFTWARE AG AT A GLANCE
© 2018 Software AG. All rights reserved.
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
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BUSINESS LINES
© 2018 Software AG. All rights reserved.
*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%
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DATA CENTERED ERA REQUIRES SOFTWARE CENTRICITY
© 2018 Software AG. All rights reserved.
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.
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SOFTWARE AG IOT PLATFORM CAPABILITES ACQUISITIONS TO CATER THE IOT NEEDS
2011 2013 2016
© 2018 Software AG. All rights reserved.
2017
Big Data &
Streaming
Analytics
Machine
Learning
Edge
Computing
Device
Connectivity
IoT Acquisitions
2010 2018
Strategic
decision
for IoT
Artificial
Intelligence
Time-series
Analytics
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SOFTWARE AG MAIN ACQUISITIONS FOR IOT
© 2018 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
• 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
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ESSENTIAL CAPABILITIES TO SUCCEED IN IOT
© 2018 Software AG. All rights reserved.
IOT
Artificial
Intelligence
Time-Series
Analytics
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DIGITAL BUSINESS PLATFORM (DBP) & IOT EVOLUTION
© 2018 Software AG. All rights reserved.
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
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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
© 2018 Software AG. All rights reserved.
11 |
CUSTOMER BASE IS MATCHING IOT GROWTH SECTORS
© 2018 Software AG. All rights reserved.
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)
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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
© 2018 Software AG. All rights reserved.
14 |
ADDITIONAL INFORMATION
•ACQUISITIONS AND INNOVATION
•FINANCIAL PERFORMANCE
•SHAREHOLDER STRUCTURE
© 2018 Software AG. All rights reserved.
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
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*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
© 2018 Software AG. All rights reserved.
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+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)
© 2018 Software AG. All rights reserved.
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
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DBP Total Revenue
Adabas & Natural
Operating Margin Group
(EBITA non-IFRS)2)
OUTLOOK
© 2018 Software AG. All rights reserved.
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
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2018 TURNING POINT / DIGITAL BUSINESS DRIVING GROWTH
© 2018 Software AG. All rights reserved.
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
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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
© 2018 Software AG. All rights reserved.
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
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Investor Relations
Uhlandstrasse 12
64297 Darmstadt
Germany
T: +49 (0) 6151 / 92 1900
F: +49 (0) 6151 / 9234 1900
W: softwareag.com
© 2018 Software AG. All rights reserved.