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LEADING THE
EVOLUTIONInvestor & Analyst Strategy Day28/09/2009
2
AGENDA
9.30am Welcome and agenda Tim Brill, IR Director
9.35am Introduction Kevin Loosemore, Chairman
Market opportunity
9.45am Market overview Stuart McGill, CTO
Business Models, M&A
10.30am Revenue and growth metrics, Borland & Compuware Nick Bray, CFOintegration progress, M&A strategy post integrations Andy Greaves, Head of
Go To Market Integration
11.15am Coffee
Go-To-Market Structures and Process
11.30am Field operations - resources, channels, geographies, Jorge Dinares, customer examples President, International Sales
11.50am Partner case study Eric Pinseel, EMEA SolutionSales Director, Microsoft
12.10pm Management Panel Q&As
12.30pm Summary and close Kevin Loosemore, Chairman
3
The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated
(“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the
following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments
cannot be relied upon as a guide to the future performance of such investments.
This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire securities in Micro Focus International plc (the “Company”) or any company within the Micro Focus Group.
The release, publication or distribution or this presentation in certain jurisdictions may be restricted by law, and therefore persons in such
jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.
Certain statements contained in this presentation constitute forward-looking statements. All statements other than statements of historical facts
included in this presentation, including, without limitation, those regarding the Company‟s financial condition, business strategy, plans and
objectives, are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including
the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other variations or
comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the
actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions
regarding the Company‟s present and future business strategies and the environment in which the Company will operate in the future. Such risks,
uncertainties and other factors include, among others: the level of expenditure committed to development and deployment applications by
organisations; the level of deployment-related turnover expected by the Company; the degree to which organisations adopt web-enabled services;
the rate at which large organisations migrate applications from the mainframe environment; the continued use and necessity of the mainframe for
business critical applications; the degree of competition faced by the Company; growth in the information technology services market; general
economic and business conditions, particularly in the United States; changes in technology and competition; and the Company‟s ability to attract
and retain qualified personnel. These forward-looking statements speak only as at the date of this presentation. Except as required by the Financial
Services Authority, or by law, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise.
SAFE HARBOUR STATEMENT
LEADING THE
EVOLUTIONKevin Loosemore, ChairmanIntroduction
5
INTRODUCTION
Micro Focus is now positioned with:
A fantastic market opportunity…
….with potentially compelling financials…
…..that can be delivered by quality execution.
LEADING THE
EVOLUTIONInvestor & Analyst Strategy Day28/09/2009
LEADING THE
EVOLUTIONStuart McGill, CTOMarket overview, and market opportunities
8
THE ENTERPRISE APPLICATION LANDSCAPE
Windows
C#
UNIX/Linux
C++/Java
Web
Ajax, Flash
IMS CICS
Linux
Javaz/OS
PL/1
COBOL
COBOL
9
THE MICRO FOCUS OPPORTUNITY
Unique focus on the value of Enterprise Applications
Delivering „customer‟ choice
Enabling modernisation
Industry partnerships
10
Analyse Develop Test TrackReq’t Deploy
The Software Development Lifecycle is a process used by all software developers to
build applications
It consists of a series of sequential steps that software developers and development
managers understand
Software tools have evolved to apply to each stage of the process, and as a result,
created a series of separate software tools markets
Micro Focus group these distinct markets under the term Application Management
AN INTRODUCTION TO MARKET SEGMENTS – THE SOFTWARE DEVELOPMENT LIFECYCLE
11
MICRO FOCUS STRATEGY
The long term strategy consists of three overlapping phases:
3
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
Future Potential
COBOL – growing the
„core‟ market
13
Migrations from proprietary platforms creates step changes in market opportunity
1959-1976 1976-2006
Proprietary COBOL
Markets
Open COBOL
Expansion
Migrations
from Vendor
to Open
Micro Focus
COBOL
Market
THE COBOL MARKET – HISTORIC GROWTH DRIVERS
Other Other
14
Migrations from other platforms show first signs of promise
Open COBOL
Expansion
Migrations
from Vendor
to Open
Micro Focus
COBOL
Market
2006-2009
THE COBOL MARKET – CURRENT GROWTH DRIVERS
Other
15
WW COBOL Tools
Com
ments
AnalyseCOBOL
Analyse Develop
Open
COBOL
$620m
Micro Focus Available
Market
MICRO FOCUS COBOL MARKETS IN 2006
Source: 1Gartner, IDC, Forrester, Competitor revenues
Segment
Micro
Focus
Market
Hist (06-08)
Fcst (08-11)
Product /
Jargon
Mkt size1
(2008 figures)
Application
Assessment and
Understanding
$65m
20%
6-8%
Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
„Stepping stone‟ to
upsell other
segments
Utilised extensively
as part of services
engagements
Development and
deployment tools
for COBOL
$555m
4%
2-4%
Stable, profitable
COBOL opportunity
with modest market
growth expected
Acu and RM (Liant)
brands added to
extend ISV base
Micro Focus
expected to
outperform market
growth expectations
16
Com
ments
Micro Focus
Available Market
MICRO FOCUS COBOL MARKETS TODAY
WW COBOL Tools
AnalyseCOBOL
Analyse Develop
Open
COBOLMainframe
COBOLMigrations
Development and
deployment tools
for COBOL
$740m
4%
2-4%
Application
Assessment and
Understanding
$65m
20%
6-8%
$1,300m
-2%
-2-4%
Mainframe
application
migration
>30% of
mainframe
>10%
>10%
Development and
deployment tools
for Mainframe
COBOL
$2,105m
Stable, profitable
COBOL opportunity
with modest market
growth expected
Acu and RM (Liant)
brands added to
extend ISV base
Micro Focus
expected to
outperform market
growth expectations
Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
„Stepping stone‟ to
upsell other
segments
Utilised extensively
as part of services
engagements
Mature market
dominated by IBM
Other major players
(CA, Compuware)
deriving significant
maintenance
revenues
Little innovation is
creating market
potential for
customers that will
always be on the
mainframe
Rapidly expanding
market having
„crossed the chasm‟
SME mainframe
customers moving
off the platform,
large customers
considering
workloads
Microsoft partnership
has been critical to
building credibility
and mindshare
Segment
Micro
Focus
Market
Hist (06-08)
Fcst (08-11)
Product /
Jargon
Mkt size1
(2008 figures)
Source: 1Gartner, IDC, Forrester, Competitor revenues
17
Stable, profitable
COBOL opportunity
with modest market
growth expected
Acu and RM (Liant)
brands added to
extend ISV base
Micro Focus
expected to
outperform market
growth expectations
Segment
Com
ments
Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
„Stepping stone‟ to
upsell other
segments
Utilised extensively
as part of services
engagements
Micro
Focus
Market
Mature market
dominated by IBM
Other major players
(CA, Compuware)
deriving significant
maintenance
revenues
Little innovation is
creating market
potential for
customers that will
always be on the
mainframe
Rapidly expanding
market having
„crossed the chasm‟
SME mainframe
customers moving
off the platform,
large customers
considering
workloads
Microsoft partnership
has been critical to
building credibility
and mindshare
Capabilities added
through the
NetManage
acquisition
„Stepping stone‟ to
cross-sell other
segments
Used as part of
mainframe
migrations
MICRO FOCUS COBOL MARKETS TODAY ($2,405M)
WW COBOL Tools
AnalyseCOBOL
Analyse Develop
Open
COBOLMainframe
COBOLMigrations
Development and
deployment tools
for COBOL
$740m
4%
2-4%
Application
Assessment and
Understanding
$65m
20%
6-8%
$1,300m
-2%
-2-4%
Mainframe
application
migration
>30% of
mainframe
>10%
>10%
Development and
deployment tools
for Mainframe
COBOL
Mainframe
application
integration tools
$300m
2%
0-2%
Hist (06-08)
Fcst (08-11)
Product /
Jargon
Mkt size1
(2008 figures)
Enterprise
Integration
Source: 1Gartner, IDC, Forrester, Competitor revenues
18
WW COBOL Tools
Development and
deployment tools
for COBOL
$740m
4%
2-4%
Segment
Product /
Jargon
Mkt size1
(2008 figures)
Hist (06-08)
Fcst (08-11)
AnalyseCOBOL
Application
Assessment and
Understanding
$65m
20%
6-8%
Analyse Develop
Open
COBOL
Micro
Focus
Market MainframeCOBOL
-2%
-2-4%
Migrations
Mainframe
application
migration
>10%
>10%
Enterprise
Integration
Mainframe
application
integration tools
2%
0-2%
3rd
2nd
1st
1st
Footp
rint
Micro Focus
Mkt Share
Opportunity
LT Opport
2nd
Brand Ent ServerRelativity Express RumbaMf Express
MICRO FOCUS COBOL MARKET OPPORTUNITY
Development and
deployment tools
for Mainframe
COBOL
$1,300m>30% of
mainframe$300m
Source: 1Gartner, IDC, Forrester, Competitor revenues
19
Micro Focus has an available COBOL tools market of $2,405m
The company has the potential to exceed market growth in its „open‟ COBOL business
The Migrations business is growing at >10% and shows promise
The COBOL market continues to be a growth engine for the business
COCOL MARKETS SUMMARY
EXPANDING
INTO APPLICATION MANAGEMENT TOOLS
21
MICRO FOCUS STRATEGY
The long term strategy consists of three overlapping phases:
3
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
Future Potential
22
APPLICATION MANAGEMENT MARKETS INTRODUCTION
Micro Focus has acquired positions in a number of separate software tools
markets grouped under the term ‘Application Management’
The addition of Borland, and Compuware’s Testing and ASQ division, creates a
platform for future growth
The acquired products are synergistic with our ‘core’ COBOL market and offer
immediate potential
COBOL software development groups represent only 20% of the overall market,
and opportunity
Testing is the strategic focus for our execution plans
23
Integrated Development Environment (IDE)
Enterprise Application Development in COBOL and PL/I
Micro Focus Market Positions
BuildAnalysisCode/
CompileRequirements
Quality
Assurance
and Testing
Developer
TestDeploy
AnalysisRequirementsQA
Verification
and Testing
Deploy
Integrated Development Environment (IDE)
BuildCode/
Compile
Developer
Test
MICRO FOCUS SOFTWARE DEVELOPMENT LIFECYCLE IN 2006
Track
24
Integrated Development Environment (IDE)
Enterprise Application Development in COBOL and PL/I
Micro Focus Market Positions
BuildAnalysisCode/
CompileRequirements
Quality
Assurance
and Testing
Developer
TestDeploy
AnalysisRequirementsQA
Verification
and Testing
Deploy
Integrated Development Environment (IDE)
BuildCode/
Compile
Developer
Test
Track
MICRO FOCUS SOFTWARE DEVELOPMENT LIFECYCLE TODAY
Track
25
COBOLdevelopment
(Windows/UNIX)
COBOLMigrations
PL/I Migrations
MainframeDevelopment
Modernization
THE ROLE OF ACQUISITIONS
EnterpriseApplication
Development
26
Enterprise JavaDevelopment
Enterprise C Development
Web ApplicationDevelopment
MicrosoftApplication
Development
THE BROADER MARKET FOR TOOLS
EnterpriseApplication
Development
27
Track
Software Config &
Change Mgmt
(SCCM)
$1,100m
10%
2-4%
Mature / saturated
and competitive
market – not core
focus but should
provide valuable
maintenance
streams
Open source
solutions creating
disruption in market
Analyse
Application
Assessment and
Understanding
$100m
20%
6-8%
Micro Focus has
expanded its market
capability with the
acquisition of
Relativity
Potential high
growth market –
diverse approaches
preventing
expansion
Slow burn
investment
„Stepping stone‟ to
upsell other
segments
Requirem’ts
Requirements mgmt
/ Definition
$200m
10%
6-8%
Relatively small
though high growth
market
Micro Focus is a #2
player with Caliber
brand from Borland
Low customer base
penetration
Serious focus from
IT organisations to
manage demand
and delivery
Can often lead to
follow-on sales
across other
products
Develop
Development tools,
Integrated Design
Environments (IDE)
$3,000m
4%
2-4%
Stable, profitable
COBOL opportunity
with modest market
growth expected
Micro Focus
expected to drive
market growth
expectations
Other languages
dominated by either
Microsoft or Open
Source
Rapid growth in
volume expected (if
not revenues)
Test
Performance &
Load testing,
Functional testing,
Test mgmt
$2,000m
13%
8-10%
Large, high growth
market
Micro Focus has
strong market
positions and
complementary
offerings
Customer base
from Borland and
Compuware
significant platform
for future growth
Market linked
closely to
requirements
DeployStep
Product /
Jargon
Mkt size1
(2008 figures)
Gro
wth
Com
ments
Hist (06-08)
Fcst (08-11)
1
MICRO FOCUS APPLICATION MANAGEMENT MARKETS ($6,400M)
Source: 1Gartner, IDC, Forrester, Competitor revenues
28
Track
Software Config &
Change Mgmt
(SCCM)
$1,100m
10%
2-4%
5th
Assess options for
future growth and
consolidation
Analyse
Application
Assessment and
Understanding
$100m
20%
6-8%
2nd
Slow burn
investment with
unique capability
alongside other
segments
Requirem’ts
Requirements mgmt
/ Definition
$200m
10%
6-8%
Strategic position
alongside testing
Develop
Development tools,
Integrated Design
Environments (IDE)
$3,000m
4%
2-4%
1st
Cloud platform
upgrades offer
more rapid growth
in future
Test
Performance &
Load testing,
Functional testing,
Test mgmt
$2,000m
13%
8-10%
3rd
Large, high growth
market with strong
offerings
DeployStep
Product /
Jargon
Mkt size1
(2008 figures)
Footp
rint
Micro Focus
Mkt Share
Opportunity
Longer Term
Comments
2nd
Brand Caliber Relativity COBOL Silk StarTeam
MICRO FOCUS APPLICATION MANAGEMENT OPPORTUNITY
Gro
wth Hist (06-08)
Fcst (08-11)
1
Source: 1Gartner, IDC, Forrester, Competitor revenues
** Micro Focus has the potential to exceed market growth rate due to the double digit growth migrations opportunity within this market
NB - Development market segment includes both development and deployment revenues for Cobol - Deployment market segment is deployment of all languages excluding Cobol
29
TrackAnalyseRequirements Develop Test Deploy
Mainframe
Open
Cloud
Windows
Web
Micro Focus value proposition focused on customers with major focus on both Open and Windows platforms in a heterogeneous market (85% of customers)
Mainframe expertise in modernising applications base creates further unique capability in the market
Micro Focus‟ ISV applications offer significant and immediate cross-selling potential across segments and platforms
Understanding of developer platforms required to target revenue bearing, profitable market segments
Strategic alliances critical e.g. Microsoft, to add value
Web platforms will be extended through organic growth where possible – requirements are small footprint, agile products accessed via the web
Cloud architectures are fundamental across all segments over the next 5 years
Mainframe platform of interest to extend Micro Focus‟ reach across all major enterprise platforms generating significant revenue
Sufficient scale required to address mainframe segment would imply future acquisition potential
MICRO FOCUS CUSTOMER SEGMENTS - DEVELOPER PLATFORMS
30
Micro Focus has an available market opportunity of $6,400 million
Application Management is a series of linked software tools based market
segments which include our core COBOL market of $2,405 million
The available market in ‘develop’ment expands to $3,000 million to include
coverage for other languages
Testing is the strategic market for growth and the focus of management
Testing is expected to grow at >10% after full integration is achieved
This is a significant platform for the future growth of the business
APPLICATION MANAGEMENT MARKETS SUMMARY
FUTURE
POTENTIAL
32
MICRO FOCUS STRATEGY
The long term strategy consists of three overlapping phases:
3
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
Future Potential
33
Software Config &
Change Mgmt
(SCCM)
$1,100m
10%
2-4%
Mature / saturated
and competitive
market – not core
focus but should
provide valuable
maintenance
streams
Open source
solutions creating
disruption in market
Application
Assessment and
Understanding
$100m
20%
6-8%
Micro Focus has
expanded its market
capability with the
acquisition of
Relativity
Potential high
growth market –
diverse approaches
preventing
expansion
Slow burn
investment
„Stepping stone‟ to
upsell other
segments
Requirements mgmt
/ Definition
$200m
10%
6-8%
Relatively small
though high growth
market
Micro Focus is a #2
player with Caliber
brand from Borland
Low customer base
penetration
Serious focus from
IT organisations to
manage demand
and delivery
Can often lead to
follow-on sales
across other
products
Development tools,
Integrated Design
Environments (IDE)
$3,000m
4%
2-4%
Stable, profitable
COBOL opportunity
with modest market
growth expected
Micro Focus
expected to drive
market growth
expectations
Other languages
dominated by either
Microsoft or Open
Source
Rapid growth in
volume expected (if
not revenues)
Performance &
Load testing,
Functional testing,
Test mgmt
$2,000m
13%
8-10%
Large, high growth
market
Micro Focus has
strong market
positions and
complementary
offerings
Customer base
from Borland and
Compuware
significant platform
for future growth
Market linked
closely to
requirements
Application servers,
run-time,
deployment
>$10,000m
c. 6%
2-4%
Deployment is a
large market and
spans multiple
software segments
– it is a “must-
have”, but not an
independent
strategic focus
Micro Focus has
deployment
associated with
their own products
Potential to expand
into other segments
Step
Product /
Jargon
Mkt size1
(2008 figures)
Gro
wth
Com
ments
Hist (06-08)
Fcst (08-11)
1
TrackAnalyse Develop Test Deploy
MICRO FOCUS APPLICATION MANAGEMENT MARKETS
Requirement
s
Source: 1Gartner, IDC, Forrester, Competitor revenues
34
Track
Software Config &
Change Mgmt
(SCCM)
$1,100m
10%
2-4%
5th
Assess options for
future growth and
consolidation
Analyse
Application
Assessment and
Understanding
$100m
20%
6-8%
2nd
Slow burn invest-
ment with unique
capability alongside
other segments
Requirement
s
Requirements mgmt
/ Definition
$200m
10%
6-8%
Strategic position
alongside testing
Develop
Development tools,
Integrated Design
Environments (IDE)
$3,000m
4%
2-4%
1st
Cloud platform
upgrades offer
more rapid growth
in future
Test
Performance &
Load testing,
Functional testing,
Test mgmt
$2,000m
13%
8-10%
3rd
Large, high growth
market with strong
offerings
DeployStep
Product /
Jargon
Mkt size1
(2008 figures)
Gro
wth
Footp
rint
Micro Focus
Mkt Share
Opportunity
Longer Term
Hist (06-08)
Fcst (08-11)
1
2nd
Brand Caliber Relativity COBOL Silk StarTeam
Niche
Potential to expand
into other segments
working with
strategic partners
Visibroker
Application servers,
run-time,
deployment
>$10,000m
c. 6%
2-4%
MICRO FOCUS APPLICATION MANAGEMENT MARKETS
Source: 1Gartner, IDC, Forrester, Competitor revenues
35
EnterpriseApplication
Development
Enterprise JavaDevelopment
Enterprise CDevelopment
Web ApplicationDevelopment
MicrosoftApplication
Development
Potential New Deployment Opportunities with
Visibroker
POTENTIAL NEW DEPLOYMENT OPPORTUNITY
36
MICRO FOCUS COBOL MARKET FUTURES – ENTERPRISE CLOUD SERVICES
Web 2.0/3.0
UI/Applications
[Auction]
Micro Focus
Enterprise Cloud
ServicesDevelopment
Services
Application
Hosting
Private / Public
Database / storage
Management
Other Cloud-based
applications
CLOUD
37
FUTURE MARKETS SUMMARY
Micro Focus have a number of niche positions in other market segments that are
of interest and that could be significant in the longer term
‘Cloud’ architectures will be a significant part of all of the company’s activities in
the medium term and across all primary market segments
– COBOL
– Testing
– Application Management
SUMMARY
39
SUMMARY
Micro Focus has significantly increased its available market
– From $620m in 2006 to $6,400m in 2009
The COBOL market continues to be a growth engine for the business
– Migrations are fuelling the underlying growth of COBOL revenues
Micro Focus has moved into a number of software tools markets grouped under Application Management
Testing is the focus for growth alongside migrations
A number of niche positions offer great potential in the future
‘Cloud’ architectures will become significant in the medium term across all of the company's offerings
LEADING THE
EVOLUTIONNick Bray, CFO,
Business models to address market opportunities,
M&A strategy, Borland & Compuware integrations,
and debt position
41
LAYING THE FOUNDATIONS
Significant market opportunity
Three years of strong organic growth
Seven acquisitions – five in last 12 months
Borland/Compuware integration – first phase nearing completion
Next priority to optimise total Group operating model
– go-to-market alignment across enlarged solution set
– maximise sales effectiveness across type, channel, product and geography
– drive further G&A efficiency opportunities, further improve systems and processes
Invest appropriately for future growth
Medium to long term further acquisition potential
42
POTENTIALLY COMPELLING FINANCIALS
The foundations give us the opportunity to expand Earnings Per Share:
Integration „dividend‟
Organic „dividend‟
Cash generation „dividend‟
Balance sheet „dividend‟
43
4.7%
49.6%45.7%
58%
30%12%
47.6%48.2%
4.2%
57%
25%18%
REVENUE PROFILE
Group revenue breakdown Licence revenue breakdown
FY2009
FY2008
OEM
Higher volume/Low value
Large transactions
Licence
Maintenance
Consultancy
44
REVENUE PROFILE FY2009 – „CORE‟ PRODUCTS
Migration revenues have grown at approximately 50% per year the last two years (from low base)
Solid organic growth in core COBOL, aided by acquisitions of Acucorp and Liant
APM
Modernization/migration
Core COBOL development
APM
Modernization/migration
Core COBOL development
FY2009 FY2006
5%
27%
68%
7%
20%
73%
45
65%7%
28%
REVENUE PROFILE FY2009 – TESTING/ASQ PRODUCTS
Revenue by Type
23%
23%
54%
Licence
Maintenance
Consulting
Test
Other
Visibroker
Revenue by Product
46
8%
8%
19%
44%
18%3%
MICRO FOCUS COMBINED GROUP REVENUE PROFILE
41%
54%
5%
Revenue by Type Revenue by Product
Testing
Other
Visi
APM
DEV
MOD/MIG
Licence
Maintenance
Consulting
47
GROWTH STRATEGY
Strengthening the foundations
Continued focus on organic growth
Continued growth through acquisitions
48
ACQUISITION AS AN END-TO-END PROCESS
IntegrationPre-DD Organic
Growth
Success criteria
Early financial
views
Risk
assessment
• Onsite
• Fast
• Execution of
decisions
made
Integration planning
Due Diligence
49
BORLAND & COMPUWARE INTEGRATIONS PROGRESS
32 work streams have delivered 229 out of 294 deliverables
Programme is being managed by a team of 20 staff
Activities are tracking to plan
Costs are tracking within budget
Compuware integration complete
SYNERGIES
Majority of G&A now within
Micro Focus
External spend on tax, audit,
legal and listing / compliance
Cut almost to NIL
Consolidation underway of
facilities in France, Germany,
Australia, Japan, Brazil,
Germany Singapore & UK
Combined teams except
independent Borland R&D facility
PEOPLE
Took out more than 150 heads in the
US and Singapore day 1
Will have taken out more than 300
heads, by 15/11
COST CONTROL
All non-integration projects
stopped
Review of all spend on
subcontracting, external advice,
etc. completed with contracts
terminated where appropriate
Go forward budgets modified to
fit Micro Focus norms. (Spend
as percentage of revenue etc.)
50
ACQUISITION STRATEGY
Non-organic growth current markets Related markets
Organic growth current markets Extended markets
51
(ASQ division)
Scale
Acq
uir
ed
Bo
lt-o
n
TrackAnalyseRequirem‟ts Develop Test Deploy
POTENTIAL SOFTWARE DEVELOPMENT LIFECYCLE TARGETS
52
STRENGTHENING THE FOUNDATIONS
Global 2000 sales execution and sales productivity
Multi product/multi channel GTM
Inside sales coverage
Direct coverage of new territories
Consulting and systems integration
Product requirements process
Development alignment and efficiency
Location and G&A efficiencies
53
CASH HIGHLIGHTS
Cash generated from continuing operation in FY2009 $105.0m (2008: $91.0m)
Cash balance at 30 April 2009 of $71.6m (2008: $92.4m), after NetManage, Liant and Relativity acquisitions
$215m debt facility, $100m net debt at 31st August 2009
$58.2m
$91.0m
$105.0m
2007 2008 2009
Cash generation
54
POTENTIALLY COMPELLING FINANCIALS
The foundations give us the opportunity to expand Earnings Per Share:
Integration „dividend‟
Organic „dividend‟
Cash generation „dividend‟
Balance sheet „dividend‟
LEADING THE
EVOLUTIONJorge Dinares, President International Sales
Micro Focus „go to market‟ models & how we execute –
resources, channels, customers
56
APPLICATION MANAGEMENT & MODERNIZATION
EMEA, Latin America and India – Go-To-Market Focus
Management team with blend of new talent and Micro Focus heritage
Established markets penetrated with broader solutions offers and growing numbers of
large customer transactions
New geographies addressed through direct investment and effective indirect channels
High sales conversion rates, robust pipeline
Compelling customer propositions for both sides of economic cycle
– Cost reduction, rapid ROI, productivity improvements
57
PROFESSIONAL AND RIGOROUS SALES MANAGEMENT
Salesforce.com system adopted
Daily focus on pipeline – detailed weekly management reviews
Sales methodology and training a key focus
Professional approach to pipeline development, management and deal closure
58
Customer Focus
APPLICATION MANAGEMENT AND MODERNIZATION
LEADING THE
EVOLUTIONMicrosoft, Eric Pinseel,
EMEA Solution Sales Director
Partner case study
LEADING THE
EVOLUTIONManagement Q&As
LEADING THE
EVOLUTIONKevin Loosemore, Chairman
Summary and close
62
SUMMARY
Micro Focus is now positioned with:
A fantastic market opportunity…
…with potentially compelling financials…
…..that can be delivered by quality execution.
LEADING THE
EVOLUTIONInvestor & Analyst Strategy Day28/09/2009