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Software AG Annual Shareholders’ Meeting 2004

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Presentation on theme: "Software AG Annual Shareholders’ Meeting 2004"— Presentation transcript:

1 Software AG Annual Shareholders’ Meeting 2004
Title of PPT 25-Mar-17 Software AG Annual Shareholders’ Meeting 2004 30th April 2004 Commerzbank, Frankfurt © Software AG, 2003

2 Software AG Annual Shareholders’ Meeting 2004
Title of PPT 25-Mar-17 Software AG Annual Shareholders’ Meeting 2004 Karl-Heinz Streibich CEO, Software AG © Software AG, 2003

3 Title of PPT 25-Mar-17 Review of 2003 © Software AG, 2003

4 2003 – Year of Restructuring
Title of PPT 25-Mar-17 A difficult year for the IT industry Stagnant IT investment by companies Lengthy decision-making processes But: By end of the year, first signs of an economic recovery Software AG has exceeded financial forecasts: Sales by €7 million Operating result by €5 million Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

5 Software AG 2003 Mainstay of Sales
Title of PPT 25-Mar-17 56 % ADA/ NAT 29% PS 10% XML Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

6 Software AG 2003 Product Situation
Title of PPT 25-Mar-17 Adabas / Natural: Mainframe relatively stable at high level Tamino / EntireX: Global potential for growth exists Key competence XML integration Further extend market leadership in Europe Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

7 Plan for Profitable Growth
Title of PPT 25-Mar-17 Internationalization: Global networked company Focus: Expansion of two international business lines Restructuring: Rightsizing of the company Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

8 Global Network Americas: 22 countries Central and Eastern Europe:
Title of PPT 25-Mar-17 Americas: 22 countries Central and Eastern Europe: 9 countries 32% 28% 23% 17% Northern Europe, Asia/Pacific, South Africa and Japan: 18 countries Southern and Western Europe: 10 countries Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

9 Global R&D Network UK: 15 R&D Employees USA: 70 R&D Employees
Title of PPT 25-Mar-17 Technology UK: 15 R&D Employees USA: 70 R&D Employees Germany: 243 R&D Employees Spain: 8 R&D Employees India: 43 R&D Employees Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

10 XML Business Integration Portfolio
Title of PPT 25-Mar-17 Jonathan Airey XML Business Integration XML Integration Solutions E-Government Self-Service Single Customer View Supply Chain Integration XML Integration Packages Information Integration (EII) Service Integration (ESB) Legacy Integration Business Process Management XML Product Families Communicator XML Mediator XML Integration Services Business Process Consulting Information Strategy Project Implementation 24x7 Support Education and Training Infrastructure Assessments Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

11 Enterprise Transaction Systems (ETS) Portfolio
Title of PPT 25-Mar-17 Joe Gentry Enterprise Transaction Systems (ETS) Application Management Services ETS Modernization Packages Natural Productivity Legacy Integration Web Enablement OPTIMIZE EXTEND EXTEND MANAGE ETS Product Families ETS Advantage Services Technical Account Manager Performance & Tuning Installation Services DBA Services Mentoring Migration Services Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

12 Important Customer Projects
Title of PPT 25-Mar-17 Americas New York City Department of Buildings Providence Washington Insurance State of Alaska Southern and Western Europe Vodafone Amsterdam Airport Schiphol Universidad de León Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

13 Important Customer Projects
Title of PPT 25-Mar-17 Central and Eastern Europe Apollo Optik Sony Music Entertainment DLR (Deutsches Zentrum für Luft- und Raumfahrttechnik) Northern Europe, Asia/Pacific, South Africa and Japan Welland Partnership Shepway District Council Nissan Australia Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

14 Out Performance Stock Value 2003
Title of PPT 25-Mar-17 €20,19 €9,59 Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

15 Title of PPT Arnd Zinnhardt CFO, Software AG
25-Mar-17 Results Full Year 2003 Arnd Zinnhardt CFO, Software AG © Software AG, 2003

16 Agenda 2003 Currency Impacts Revenue Results
Title of PPT Agenda 25-Mar-17 2003 Currency Impacts Revenue Results Balance Sheet and Cash Flow Employees 2004 International Financial Rules and Standards Revenue and Results 1st Quarter Financial Forecast Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

17 Title of PPT 25-Mar-17 Currency Impacts © Software AG, 2003

18 Currency Impacts on Revenue FY 2003
Title of PPT 25-Mar-17 (in mn. euros) Actual 2002 Change Volume Currency Effect Actual 2003 -21 -32 Total Revenue 475.0 422.2 -11% -4% -7% +10 -28 Product Revenue 313.9 295.5 -6% +3% -9% Services Revenue -31 -4 -22% 159.6 124.3 -19% -3% Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

19 Title of PPT 25-Mar-17 Revenue Full Year 2003 © Software AG, 2003

20 Revenue 2003 % Full Year 2003 2002 at constant currency
Title of PPT 25-Mar-17 Revenue 2003 (in mn. euros) Δ Δ% Full Year 2003 2002 % at constant currency Product Revenue 295.5 313.9 -6% +3% License 104.3 113.0 -8% 0% Maintenance 191.2 200.9 -5% +5% Services 124.3 159.6 -22% -19% Other 2.4 1.5 +52% +70% TOTAL 422.2 475.0 -11% -4% Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

21 Regional Revenue Distribution 2003
Title of PPT 25-Mar-17 Regional Revenue Distribution 2003 Services Revenue Southern / Western Europe 54% Central- / Eastern Europe 27% Americas 13% Northern Europe, Asia-SA 6% Product Revenue Americas 40% Northern Europe, Asia-SA 22% Central- / Eastern Europe 21% Southern / Western Europe 17% 124.3 mn. euros 295.5 mn. euros Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

22 Research & Development by Product Group
Title of PPT 25-Mar-17 (in mn. euros) 2003 Total: 58.3 Other 4.4 XML Integration 27.5 ETS 26.4 2002 Total: 64.3 Other 4.3 XML Integration 34.4 ETS 25.6 Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

23 Title of PPT 25-Mar-17 Result Full Year 2003 © Software AG, 2003

24 Result 2003 (stated) - - - - - - - - - Δ 2003 2002 % Operating EBITDA
Title of PPT Result 2003 (stated) 25-Mar-17 (in mn. euros) Δ 2003 2002 % Operating EBITDA 67.4 63.7 +6% Goodwill Amortization - 22.0 - 21.9 +0% Depreciation - 7.4 - 13.4 +45% Financial Result +3.5 +3.2 +9% Operating Profit before Tax 41.5 31.6 +31% Income from Investments - +36.7 Restructuring Expenses - 40.8 - 17.6 Profit before Tax 0.7 50.7 Taxes - 4.0 - 17.2 Net Income - 3.4 33.5 Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

25 Operating Earnings 2003 (excl
Operating Earnings 2003 (excl. Restrukturing Expenses and Income from Investments) Title of PPT 25-Mar-17 (in mn. euros) 2003 2002 Δ % Operating Profit before Tax 41.5 31.6 +31% Margin (% of Revenue) 10% 7% Pro Forma Profit after Tax* 17.4 11.3 +54% Margin (% of Revenue) 4% 2% Pro Forma Earnings per Share 0.64 0.41 +54% Pro Forma Earnings per Share (pre Amortization of Goodwill) 1.44 1.22 +19% * Operating profit before tax ./. tax rate and amortization of goodwill Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

26 Balance Sheet and Cash Flow
Title of PPT 25-Mar-17 Balance Sheet and Cash Flow © Software AG, 2003

27 Assets Liabilities Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2002 2003 2002
Balance Sheet Title of PPT 25-Mar-17 (in mn. euros) Assets Liabilities Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2002 2003 2002 2003 41.7 Other Liabilities 35.9 Cash and Cash Equivalents 74.2 7.4 117.6 Provisions 108.7 Inventories, Trade Receivables and other Assets 137.2 130.5 57.7 Deferred Income 81.7 0.2 33.8 Deferred Taxes 6.9 7.0 Prepaid Expenses Shareholders’ Equity 199.9 Fixed Assets 221.1 228.4 214.5 445.4 Total 440.8 445.4 Total 440.8 Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

28 Cash Flow Analysis FY 2003 ./. CapEx % of Revenue FY 2003 FY 2002 Δ %
Title of PPT 25-Mar-17 (in Mio. Euro) FY 2003 FY 2002 Δ % Operating Cash Flow 15.5 40.7 -61.9% ./. CapEx -10.2 -13.8 -26.1% Free Cash Flow 5.3 26.9 -80.0% + Reversal of Factoring 24.6 28.9 -14.9% + Cash-out for Restructuring 18.6 12.1 +53.7% + Tax Payment for Previous Periods 6.0 0.0 n/a Organic Cash Flow 54.5 67.9 -19.7% % of Revenue 12.9% 14.3% Organic Cash Flow per Share* 2.00 2.49 -19.7% * 27.3 mn. shares Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

29 Title of PPT 25-Mar-17 Employees © Software AG, 2003

30 Number of Employees by Region
Title of PPT Number of Employees by Region 25-Mar-17 FTEs 2003 2002 Δ % Total 2,577 2,920 - 12% Central/Eastern Europe 382 475 - 20% (thereof Germany) (279) (367) ( - 24%) Southern/Western Europe - 816 861 - 5% Americas 493 532 - 7% Northern Europe, 174 204 - 1 5% Asia/Pacific Other incl. HQ 712 848 - 16% Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

31 Results 1st Quarter 2004 (IFRS)
Title of PPT 25-Mar-17 Results 1st Quarter 2004 (IFRS) Arnd Zinnhardt CFO, Software AG © Software AG, 2003

32 International Financial Rules and Standards (IFRS)
Title of PPT 25-Mar-17 In general, no major variations in result-relevant figures Key differences between IFRS and HGB (German GAP): Profit and loss statement No amortization of goodwill Services revenue Structuring of costs (cost of sales method) Balance sheet Fixed assets Shareholders’ equity Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

33 Revenue Q1 2004 Q 1 Q1 Δ Δ * 2004 2003 % % Product 67 . 4 69 . 2 - 3 %
Title of PPT 25-Mar-17 Revenue Q1 2004 (in mn. euro) Q 1 Q1 Δ Δ * 2004 2003 % % Product 67 . 4 69 . 2 - 3 % + 3 % License 23. 3 21. 9 + 6 % +11 % Maintenance 44, 1 47. 3 - 7 % % Service 28. 3 3. 6 - 1 7 % - 15 % Other 0. 3 0. 3 Total 95. 7 103. 1 - 7 % - 2 % * at constant currency Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

34 Operating Result (EBIT)
Title of PPT Operating Result Q1 2004 25-Mar-17 (in mn. euros) Q1 Q1 Δ 2004 2003 % Total Revenue 95.7 103.1 - 7% Cost of Sales - 33.3 - 39.4 - 15% Gross Profit 62.4 63.7 - 2% R&D - 15.0 - 16.2 - 7% Sales & Marketing - 20.6 - 26.0 - 21% Administration - 11.1 - 15.1 - 26% Other income/expense - 0.6 +1.6 Operating Result (EBIT) 15.1 8.0* +89% * pre restructuring expenses Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

35 Income from Investments Restructuring Expenses
Title of PPT Net Result 2004 25-Mar-17 (in mn. euros) Q1 Q1 2004 2003 EBIT 15.1 8.0* Financial Income 0.7 0.7 Income from Investments 0.0 0.0 Restructuring Expenses 0.0 - 31.8 Profit before Tax 15.8 - 23.1 Taxes - 6.0 8.3 Net Income 9.8 - 14.8 Earnigs per Share 0.36 - 0.54 * pre restructuring expenses Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

36 Title of PPT 25-Mar-17 Outlook 2004 © Software AG, 2003

37 Financial Forecast 2004 Title of PPT 25-Mar-17 Focus 2004 is on stabilizing revenue (net of currency effects) License sales will increase in core business lines and make up for reduction of non-strategic business Maintenance will show continued stability 2004 will show profit growth Operating result will increase by approx. 25% from previous year’s 59.1 million € Operating margin will increase Strong organic cash flow will continue EPS (including SAP SI sale Q2) expected in the range of 2.50 – 2.60 Euro Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

38 Annual Shareholders’ Meeting 2004
Title of PPT 25-Mar-17 Annual Shareholders’ Meeting 2004 Karl-Heinz Streibich CEO, Software AG © Software AG, 2003

39 Title of PPT 25-Mar-17 Outlook for 2004 © Software AG, 2003

40 Customer Requirements
Title of PPT 25-Mar-17 Customers Enterprise system modernization Business-process integration Real-time information Single view of information Self-service Simplification of value-added chain Automation of compliance etc. Mission-critical applications ERP package CRM package DMS package , etc. ... Optimize, Extend, Manage Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

41 Modernization of existing IT systems
Market Requirements Title of PPT 25-Mar-17 Customers Modernization of existing IT systems Integration of existing applications and processes Migration of platforms Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

42 Customer Orientation Research and Develop-ment
Title of PPT 25-Mar-17 Customers Marketing Enterprise Moderni- zation Research and Develop-ment Software AG system resellers (subsi-diaries) ETS Technical Architects Customers XML Technical Architects Marketing XMLi Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

43 Global Networked Company
Title of PPT 25-Mar-17 Customers Employees Technology Development of Company Value Portfolio Marketing Sales Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

44 Global Knowledge Management System
Title of PPT 25-Mar-17 Customers As an internal business management system: Global access to information about: Customer projects Customer profiles Projects and solutions Customer-visit reports Market studies Competitor studies Press information Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

45 Sales Sale of enterprise integration solutions
Title of PPT 25-Mar-17 Sales Access Board Sale of enterprise integration solutions Area managers Sale of technology products and technology solutions CIO Engineers Time Consulting Implementation Products Operation Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

46 Sales - Implementation
Title of PPT 25-Mar-17 Sales “Customer First” culture Target group: decision makers Sales via consulting services Partners with industry-specific expertise Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

47 Portfolio Marketing Joe Gentry Jonathan Airey Portfolio Marketing
Title of PPT 25-Mar-17 Portfolio Marketing Joe Gentry Jonathan Airey Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

48 Global R&D Network UK: 15 R&D Employees USA: 70 R&D Employees
Title of PPT 25-Mar-17 Technology UK: 15 R&D Employees USA: 70 R&D Employees Germany: 243 R&D Employees Spain: 8 R&D Employees India: 43 R&D Employees Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

49 Technology - Aims Title of PPT 25-Mar-17 Technology Focusing of R&D resources on 2 business lines Global R&D network Concentration on products with the potential for market leadership Link between R&D and customer requirements through the use of technology architects Aim: Expansion of market leadership as vendor for software products in the database and integration middleware sector Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

50 Employees Culture of “Customer First"
Title of PPT 25-Mar-17 Employees Culture of “Customer First" Global, cross-departmental teamwork – best practice focus Culture of innovation Culture of high performance Atmosphere of innovation, creativity and success Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

51 Development of Company Value
Title of PPT 25-Mar-17 Development of Company Value Expandable customer base with more than 3,000 customers worldwide XMLi: 20% 80% 80% ETS Modernization: Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

52 Preparation for the Future
Title of PPT 25-Mar-17 Goal: Market leader- ship Today: Growth Enterprise portfolio Organic/Sales Acquisitions Partnerships Strategy Content Brand Go-to-market model Rightsizing Focus on strengths as a software product provider Cost adjustment Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003

53 Title of PPT 25-Mar-17 © Software AG, 2003
Annual Shareholders' Meeting 2004 30 -Apr-2004 © Software AG, 2003


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