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Software AG Investor Presentation July 2003. 2Investor Presentation July 2003 Software AG Profile Germanys second largest software vendor In the high-end,

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Presentation on theme: "Software AG Investor Presentation July 2003. 2Investor Presentation July 2003 Software AG Profile Germanys second largest software vendor In the high-end,"— Presentation transcript:

1 Software AG Investor Presentation July 2003

2 2Investor Presentation July 2003 Software AG Profile Germanys second largest software vendor In the high-end, mission-critical IT business since 1969 Worldwide customer base of several thousand blue chip companies and public sector organizations Leader in XML system technology (DBMS and integration) System integrator for own products and solutions Listed at Frankfurt stock exchange (TecDAX) Market Cap 325 mio. / Free Float: 68.4%

3 3Investor Presentation July 2003 Global Business Four Business Regions (share of revenue 2002): Americas (35%) Southern/ Western Europe (26%) Central/ Eastern Europe (24%) Asia/Northern Europe (15%)

4 4Investor Presentation July 2003 Source of Revenue / Business Lines Project Services (Consulting and Implementation) Licensing of Software Products Maintenance (24x7 world wide) Product Business * (in mio. euros) * first consolidation of US acquisition

5 5Investor Presentation July * 2002 Results (in mio. euros) * first consolidation of US acquisition Operating result Net profit Op. cash flow Op. EBITA

6 Strategy

7 7Investor Presentation July 2003 Positioning of Software AG Focus on product business Licensing of software products Excellent maintenance services Global presence Technology leader in XML Expansion of the product portfolio to include standardized solutions System integrator for own products and solutions

8 8Investor Presentation July 2003 XML Server - native XML server - Storage, management, publishing and exchange of XML documents - Extremely fast and reliable database - Available on all major platforms - For large and mission-critical applications - Integration server - Leveraging legacy systems for use in new (e-)business solutions - Development platform - For large-scale (e-)business applications Core Products

9 9Investor Presentation July 2003 Number 2 worldwide market share for mainframe DBMS Customers are predominantly blue chip companies and large public authorities Adabas and Natural currently account for about ¾ of product revenue Adabas and Natural being continuously enhanced: Support for new platforms and technologies (Linux, 64 bit, XML, SQL) protects customers software investment 1/3 of R&D resources are allocated for Adabas and Natural (20 mio. euros in 2002) Adabas and Natural remain the main sources of revenue

10 10Investor Presentation July 2003 Tamino XML Server sold more than 500 times Great success with XML technology in projects Daimler Chrysler – content management system (xDWS) Local government in UK – e-government portal (IESD) Vodafone – document management North American Logistics (Van Lines) – Mobile field service application California State Board of Equalization – e-filing EntireX serves as (XML) integration server Technologically and economically very attractive customer solutions will be converted into standardized solutions Strategy Realignment

11 11Investor Presentation July 2003 Tamino in Projects: IESD, UK Project size Licenses 60 K Implementation 30 K Application Support 40 K Integrated Electronic Service Delivery (IESD) is a powerful framework for building Public Sector applications (Call Centres, CRM, etc.) Already repeated at Aylesbury Vale District Council Welland Tewkesbury Hinckley & Bosworth Borough Council United Kingdom

12 12Investor Presentation July 2003 IESD Overview SAG Products IESD Components Contact Centre Internet Portal XML Gateway Vertical Applications Business Applications Call Centre Content Management C.R.M Management Reporting Workflow Security & Audit

13 13Investor Presentation July 2003 Diogenes / xDWS Project size Licenses: 285 K PS: 1.3 mio. Problem Reduce the effort and expense to maintain and adapt automation and test systems in the areas of development, production and service. Solution Seamless development of automotive electronic control units with function prototyping, production code generation and hardware-in-the-loop test based on common XML based DTDs (xDWS / Tamino). Benefits Tight integration of all supply-chain-members. Cost-reduction. Better Quality. FASTER development! Tamino in Projects: DaimlerChrysler

14 14Investor Presentation July 2003 Tamino in Projects: Vodafone Spain Project size : 2.2 mio. Licenses: 1.4 mio. PS: 740 K Description: Electronic Bills Presentation Solution Phase: A system that enables its clients and its internal users to see their invoices and the billing information through Internet, using XML technology (Tamino XML Server). Archiving System Solution Phase: Prepare a corporate platform to archive different types of documents coming from other applications (SAP, Lotus Notes, MS Exchange,…) using Ixos products.

15 15Investor Presentation July 2003 North American Logistics (Van Lines) nAL Mobile project Project size: $710K (License $280K, PS $430K) Description: Mobile field service application integrated with SAG and non-SAG backend systems Repeatable, Yes Partnering with Extended Systems, Inc. for mobile solution called One Bridge Our Extended System partner brought valuable expertise in mobile and was key to securing this phase of nALs business Integrated the One Bridge Toolset with EntireX and Tamino Cellular EntireX ViaPhone Tamino Bill of Lading Asset Mgmt Warehouse Mgmt Product Tracking LEGACY SYSTEMS

16 16Investor Presentation July 2003 Software AG Portfolio Evolving from Technology to Solutions ProductsCapabilitiesSolutions Tamino Communicator Mediator Adabas/Natural Partners Content Management Digital Library Mobile Data Exchange Web Enablement Data Integration Self-Service Portals Content Suite Mobile Suite Partner Solutions Regional Solutions Individual Customer Solutions Committed to delivering value for our customers

17 17Investor Presentation July 2003 Current solution- business situation Expansion of Portfolio with Solutions Future solution business Business Lines Develop a custom application Core products (Tamino, EntireX, Adabas/Natural) Delivery to customer Project services/ system integration Product business (Licensing and Maintenance) Standardized solution platform Modify a solution to meet customer requirements Core products (Tamino, EntireX, Adabas/Natural)

18 1 st Quarter 2003 Financial Report

19 19Investor Presentation July 2003 Revenue Q1 2002/ % (-21%) % (+3%) -11% (-2%) Q Q % (-6%) (...) in constant currencies (in mio. euros) Other Project Services (Consulting and Implementation) Maintenance (24x7 world wide) Licensing of Software Products Product Business

20 20Investor Presentation July 2003 Licensing Revenue by Product Group Q1 2002/2003 Q1 2002Q Solutions Tamino EntireX Enterprise Transaction Other 11% 4% 60% 15% 10% 56% 18% 8% % (in mio. euros)

21 21Investor Presentation July 2003 Revenue by Region Q1 2002/ Americas Southern / Western Europe Northern Europe Asia-SA Central / Eastern Europe Actual Q Actual Q Project ServicesMaintenanceLicensingOther Actual Q Actual Q Actual Q Actual Q Actual Q Actual Q (in mio. euros)

22 22Investor Presentation July 2003 Operating EBITA by Region Q1 2002/2003 Q1 2002Q % % +82% -65% Americas Southern / Western Europe Northern Europe Asia-SA Central / Eastern Europe (in mio. euros)

23 23Investor Presentation July 2003 R&D by Product Group Q1 2002Q % 35% 25% 10% 36% 20% 16% 4% % 0% Solutions Tamino EntireX Enterprise Transaction Other (in mio. euros)

24 24Investor Presentation July 2003 Result Q1 2002/2003 (in mio. euros)

25 25Investor Presentation July 2003 Balance Sheet (in mio. euros)

26 26Investor Presentation July 2003 Cash flow Q1 2002/2003 (in mio. euros)

27 27Investor Presentation July 2003 Our medium-term goal is a Profit Margin of 15% (operating result = PbT excluding one-time effects) Savings potential of 55 to 60 million euros annually Increase in profitability Alignment of the organization in the regions Focusing R&D on the future portfolio Reduction of overhead Headcount reduction ca. FTE 300 Approx. 1/3 of the savings will be reinvested in the development of new solutions Cost cuts in 2003 cover the restructuring expenses Rightsizing of the Company

28 28Investor Presentation July 2003 Full year product revenue same level as 2002 (at constant currency) Maintenance ensuring about 45% of total revenue Project services continue to show weakness Positive operating result (about the amount of 2002) Positive operating cash flow Positive net income Outlook 2003

29 Software AG Stock information (as of June 30, 2003)

30 30Investor Presentation July 2003 Shareholder Structure as of June 30, 2003 (Number of Shares: 27,3 mio.) Software-AG- Foundation 31.6% Private Investors 11.5% Institutional Investors 56.9% Germany 36.2% UK 14.9% Rest of Europe 35.7% USA 13.1% Shareholder StructureFree Float by Region Market Cap: 325 mio. euros Free Float: 68.4% Major Funds: Classic Fund Aktiengesellschaft, Liechtenstein Capital Group Companies, Inc., USA Fidelity International Ltd., USA Rest of World: 0.1%

31 31Investor Presentation July Entry in TecDAX Software AG MDAX Nemax/ TecDAX Share Price Development as of June 30, 2002 – June 30, 2003 SAG share price: : : 11.90

32 32Investor Presentation July 2003 Top Ten TecDAX as of June 30, 2003 (in euros)

33 33Investor Presentation July 2003 Key Figures per Share (in euros)


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