Roadmap for the “Growth Company” Strategic Plan 2020

Capital Market Day 2013

February 26, 2013

Karl-Heinz Streibich

CEO

This presentation contains forward-looking statements based on 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 technologies and changes in

business strategy. Software AG does not intend or assume any obligation to

update these forward-looking statements.

Safe-Harbor-Statement

Software AG 2

1st Strategic Plan 2004 – 2012

Phase 1

Turnaround Customer Loyalty

Margin Improvement

Strategy & Portfolio

Develop HR & Processes

Phase 3

Leadership Partner Driven Growth

Image Driven Growth

M&A Portfolio Expansion

Process Excellence

Phase 2

Growth Image & Branding

Mergers & Acquisitions

Strategic Partners

Geographic Expansion

3

2004 2005

€ 411 m

2012 2010 2011 2009 2008 2007 2006

€ 1 B

Software AG

Phase 1

Turnaround Customer Loyalty

Margin Improvement

Strategy & Portfolio

Develop HR & Processes

Phase 3

Leadership Partner Driven Growth

Image Driven Growth

M&A Portfolio Expansion

Process Excellence

Phase 2

Growth Image & Branding

Mergers & Acquisitions

Strategic Partners

Geographic Expansion

4

2004 2005 2012 2010 2011 2009 2008 2007 2006

1st Strategic Plan 2004 – 2012 [Outperformed]

€ 411 m

€ 1 B

Software AG

Phase 1

Turnaround Customer Loyalty

Margin Improvement

Strategy & Portfolio

Develop HR & Processes

Phase 3

Leadership Partner Driven Growth

Image Driven Growth

M&A Portfolio Expansion

Process Excellence

Phase 2

Growth Image & Branding

Mergers & Acquisitions

Strategic Partners

Geographic Expansion

5

2004 2005 2012 2010 2011 2009 2008 2007 2006

1st Strategic Plan 2004 – 2012

€ 411 m

€ 1 B

Software AG

1,098

1st Growth Plan: 2004 - 2012

411

721

1.047

0

200

400

600

800

1.000

2004 2008 2012

Revenue in €m

77

116

165

0

30

60

90

120

150

180

2004 2008 2012

Net profit in €m

2,438

3,526

5,419

0

1.000

2.000

3.000

4.000

5.000

2004 2008 2012

Employees

108

181

248

0

50

100

150

200

250

2004 2008 2012

EBIT in €m

6 Software AG

Growing BPE Revenue and Share

7

39% 43% 47% 52% 55%

61% 57% 53% 48% 45%

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012

ETS

BPE

209 244

319 338 385

0

100

200

300

400

2008 2009 2010 2011 2012

BPE Product Revenue in €m

Software AG

Market Cap Development in Growth Phase 1

8

Closing prices: January 1, 2004 to December 31, 2012; Software AG Xetra prices, Source .comdirect

Software AG

2nd Strategic Plan 2012 – 2020

2012 2013

€ 385 m

Phase 1

Transformation SMD Investment Acceleration

Best Talent Management

Digital Enterprise Innovations

Technology M&A Focus

2020 2018 2019

Phase 3

Leadership Enterprise Digitization

Real time Big Data Mgt.

Process Management

Integration

2017 2016 2015

Phase 2

Accelerated Growth Partner Ecosystem

Portfolio Platforms

Organizational Scalability

Industry Solutions Extention

2014

€ 1 B

9 Software AG

2nd Strategic Plan 2012 – 2020 [Accelerated]

These Results were Achieved Thanks to a Long Term

Strategy and Short Term Execution Performance

2012 2013

€ 385 m

Phase 1

Transformation SMD Investment Acceleration

Best Talent Management

Digital Enterprise Innovations

Technology M&A Focus

2020 2018 2019

Phase 3

Leadership Enterprise Digitization

Real time Big Data Mgt.

Process Management

Integration

2017 2016 2015

Phase 2

Accelerated Growth Partner Ecosystem

Portfolio Platforms

Organizational Scalability

Industry Solutions Extention

2014

10

€ 1 B

Software AG

Software AG

Market Centric

Innovation

Operational Scalability

Big Deal Value

Creation

Talent Attraction & Retention

Portfolio Platforms

Eco-System Creation

Cash Flow Maximization

Seven Habits of Highly Successful Software Companies

11

12

Business Model of a Software Company

Software companies typically have the following revenue mix:

(direct sales; on-premise business model)

• 1/3 license revenue

• 1/3 maintenance revenue

• 1/3 portfolio related services & consulting

Innovative Growth Companies:

• License revenue exceeds maintenance

• SMD costs are about 1x license revenue

Maintenance Mode Software Companies/Product Lines:

• Maintenance revenue exceeds license revenue

• No growth due to no new customer wins

Software AG

Group 2012

31 %

37 %

32 %

BPE 2012

51 % / 49 %

0,8 x

ETS 2012

61 % / 39 %

Software AG

1. Market centric innovation (M&A plus R&D)

13

Transformation of Software AG Transformation at the customer

• Enabler role based on Gardner‘s 4 Forces

for the Digital Enterprise

Mobile – Cloud – Social - Big Data

• Value selling focus instead of product

selling

• Agility layer on top of classic IT silos

• Technology innovation:

50 % M&A; 50 % R&D

• From IT as a budget reduction asset

to IT as an innovation enabler in

the Digital Enterprise

• Business value provider instead of

technology hype follower

• Improve what you have instead of rip &

replace (modernization)

• Innovation drives demand - speed

dominates

Seven Habits…

Software industry as the change agent for all industries Software AG

14

2. Operational scalability

A Back Office B Front Office

• Define processes

Simplify processes

Automate processes

• Efficiency focus

Lean structure

Agile budgeting

• Market outperformance target setting

+ budget process based on investment

plans for growth

• Go-to-market transformation from

product provision to solution architecture

blue prints (platforms)

• Reference use case innovations drive

portfolio roadmap instead of domination

by technology feature roadmaps

• Global unified market communication

based on Silicon Valley expert agency

• Platform leadership strategy

• Eco-System creation & leader

Budget Target

Market

Growth

Software AG

Seven Habits…

Digital

Enterprise

Vision

Digital Project

Solutions

Software Product

Portfolio

Building Block

Solution Architecture

Projects

15

3. Big deal value creation - (go-to-market model)

Digital

Roadmap

Solutions Architecture Platforms

Customers Digital

Business Model

Software AG

Seven Habits…

4. Talent attraction & retention

16

Focus areas:

I. Developing our experts & leaders

II. Digitizing & scaling our performance management process

III. Keeping tomorrow‘s people today

IV. Becoming an employer of choice

Software AG

Seven Habits…

17 Software AG

18 Software AG

19 Software AG

20 Software AG

5. Portfolio platforms

21

Statements of direction:

I. We focus on software products in the BPE market

• Expert image as innovation leader

II. We don‘t sell hardware or applications

• Neutral provider of BPE solutions (Processes, Integration, Big Data)

III. Our full BPE portfolio is seamlessly integrated into one suite with a common

look and feel (customer experience) and a single point of operation

IV. Ease of use and lowest total cost of ownership [TCO] are our principles

V. Customer value creation and customer centric innovations are our solution

design guidelines

VI. Our portfolio suite represents the total agility layer for the Digital Enterprise

Software AG

Seven Habits…

Portfolio Platform – BPE Suite –

22

Enterprise Digital Platform (EDP)

Software AG

Software AG

Venture

capital

firms

Industry

associations

Universities

Press

Java development

groups

Analysts

Investors

IVSs

User

groups

Deployment

partners

OEM

partners

Cloud

partners

BPM

Cloud

Apps

On-premise

Apps B2B

Venture

capital firms

Sales

partners

ARIS

Cloud

6. Eco-System Creation

23

Seven Habits…

Group product revenue split

Product revenue (license plus maintenance)

drives cash flow and EPS

~80%

Innovation and Speed drives

Growth and Profitability

Group license/maintenance:

55-60 % / 40-45 %

Growth 2012 – 2018:

• Product Revenue > 75 %

• EPS (€ 3+) > 50 %

2012 2018

45%

37%

€ 1B

20%

80%

2006

14%

55%

~20%

24

7. Cash Flow Maximization

Software AG

ETS BPE

Seven Habits…

Business

Models

Digital Agility

Platform

IT Silos

25

Disruptive Technology for New Business Opportunities

Enterprise Digitizing the

Speed of Change

Agility, Scalability, Adaptability

Leveraging the

Four Forces

Building on current

IT Investments and Assets

Software AG

Thank you

Your contact:

Investor Relations phone: +49 (0) 6151 / 92 1900 Follow us on Twitter:

Uhlandstrasse 12 fax: +49 (0) 6151 / 9234 1900 @SoftwareAG_IR

64297 Darmstadt web: softwareag.com

Germany e-mail: investor.relations@softwareag.com