Software AG Investor Presentation

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May 20 2014

Software AG

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Safe-Harbor-Statement

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.

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Software AG - At a Glance

High performance

data management

Process planning,

monitoring and

analysis

Middleware to integrate

data, applications and

digital workflows

Intelligent Business

Operations and Big Data

~ €1bn revenue (FY 2013)

~ 27% operating EBIT margin (FY 2013)

~ 16% free cash flow margin (FY 2013)

> 5,000 Employees worldwide

~ 1,000 R&D

> € 2bn market cap

> 60% free float

~ 29% Software AG Foundation

70 Countries

Technology leader in system integration,

process automation and data management

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Enterprise Transaction Systems

ETS

• Manage cash cow

• Adjust cost to maintain segment margin > 60%

Business Process Excellence

• Product revenue: growth 10-20% p.a. (incl. a 50% growth from Big Data/IBO)

• >50% contribution to group result, mid-term

• Transform technology leadership into market leadership

• Increase to >80% of product revenue (€1bn)

Business Lines & Development

BPE

IT PORTFOLIO MANAGEMENT

REAL-TIME INTELLIGENCE AND BIG DATA

PROCESS AUTOMATION AND INTEGRATION COLLABORATIVE PROCESS ANALYSIS DATABASE MANAGEMENT SYSTEMS

Consulting

APPLICATION DEVELOPMENT & MODERNIZATION

ENABLER FOR OWN PRODUCT SALES (BPE/ETS)

• Successful Turnaround

• Focus on Integration and Business Solutions

• Margin expansion 44% 28% 28% S H A R E O F R E V E N U E * *based on revenue 2013: € 973m SAP CONSULTING (DISPOSAL IN Q2 2014)

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0 50 100 150 200 250 300 350 400 2006 2007 2008 2009 2010 2011 2012 2013

Maintenance – High Level of Recurring Revenue and Profits

186

213

267

305

353

362

378 > 90% of Maintenance Revenue is recurring

€m

BPE

ETS

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Free Cash Flow and Dividend per Share

0.00

0.50

1.00

1.50

2.00

2.50

3.00 2006

2007

2008

2009

2010

2011

2012

2013

FCF per Share

Div per Share

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Transforming Software AG

Prime Operational Targets 2014

Product

Revenue

60 %

40 %

ETS

Enterprise Transaction Systems

Preserve

customer

base

BPE

Business Process Excellence

Dynamic

Growth



Minimize decline



Protect maintenance base



Utilize customer access for driving

strategic projects (ETS and BPE)



Increase sales efficiency

• 2013 – hires

• Utilize full market potential



Close strategic - 7/8-digit deals

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License Revenue – Dynamic Growth in BPE Business

166

241

272 ₂₇₀

327

295

319 BPE License with sustainable growth

€m

BPE

ETS /Other

330*

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The Impact of Differentiating Solutions by Software AG

Refreshments

Supply chain

10s

of

millions

increase in profit higher response rate to marketing campaigns reduction in transfer time for assets

98

%

10

x

several million

Average annual benefit of

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0%

5%

10%

15%

20%

2011

2012

2013

2014e

*

BPE License growth 2010-2014e compared to market peers

Peer group average

Growth

yoy acc

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Turning Technology Leadership into Market Leadership:

Build Multi Channel Ecosystem and Integrated Portfolio Suite

Aris/web-Methods webMethods Apama JackBe LongJump Alfabet, ARIS

Business Process Platform Integration Platform

Terracotta Mychannels

Cloud Suite & on-premise Big Data/IBO Platform

Growth Multiple Sales Channels Single Sales Channel Growth acceleration +€50 m S +M Investment SI‘s OEM‘s/ISV‘s Products Suite

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€1 Billion

>80%

New Products (BPE+)

• Organic Growth

• Integration Technology

• Business Process Mgt.

• IBO / Big Data

• Cloud / Partner / OEM

• M&A/Innovative Technologies

2013

2018

40%

_{Enterprise Transaction}

Systems (ETS)

20% 80%

2006

60% <20%

Revenue Targets 2013 - 2018 (BPE + ETS)

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Revenue and Margin Drivers 2014+

2014

2015

2016

2017

2018

Impact new sales staff

Growing Ø deal size

Platforms / use case packaging

Recurring projects

Cloud based offerings

Partner sales / OEM

Revenue mix

Economies of scale

(R&D, G&A)

Metrics

Channel

sales

Sales

productivity

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Outlook FY 2014

Product Revenue BPE

Product Revenue ETS

273.8

422.9

260.7 FY 2013

(in €m)

+2% to +7%

- 9% to -16%*

+12% to +18%*

Outlook FY 2014

(as of Jan. 28, 2014)

Operating Result (Non-IFRS)**

* Revenue growth or decline at constant currency

** EBITA before adjustments for non-operating items (see non-IFRS earnings results)

-15%*

11%*

-7%

Q1 2014

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Key Investment Indicators

1. Footprint

: Established global software player with blue chip customer base

2. USP

: Unique technology leadership in fast growing IT segments

3. Financials

: Strong balance sheet and cash generation (dividend)

4. Assets

: Experienced management team and loyal expert staff

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Appendix

Portfolio, Market

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APPS SEARCH ERP CRM, HR ESB / SOA-GOV. DATA MGMT. COLLABORATION EVENT MGMT. RULES

Process

Automation

Integration

Middleware

Application Silos

HW Infrastructure

Analytics

Visualization

REAL-TIME DATA

In-Memory

Big Data/IBO

Enabler of the Digital Enterprise

IT 1.0

IT 3.0

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B I G D ATA a n d I N - M E M O RY D ATA M A N A G E M E N T

Software AG Agility Platform

I N T E L L I G E N T B U S I N E S S O P E R AT I O N S

Event Processing Process Mining Historic KPI's Activity Monitoring Data Analytics

Business Process Analysis

PORTFOLIO MANAGEMENT

IT Portfolio Management Enterprise Architecture

COLLABORATIVE PROCESS ANALYSIS

Proactive Alerts

Dashboards Real-Time Insight Mobile Anywhere

P R O C E S S A U TO M AT I O N / I N T E G R AT I O N

Application Integration B2B Integration SOA Governance Composite Applications

ERP

Custom CRM

Process Automation

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MOBILE

CLOUD

A gi le Inte gra tion & A uto m ation

IBO Platform for the “Smart Digital Enterprise”

B usi ness Pr ocess M anag e me nt A gi le A p p s

In-Memory Data Management & Connectivity Real-time Decisions

Proactive Alerts Dashboards &

Visualization Intelligent Actions

Continuous Analytics

Streaming Analytics Historical Pattern

Discovery Process Analytics

Business Processes Mobile events Financial & News Events Social Media

$

£

_€

¥

Sensor & machines Hadoop Business Intelligence

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In-memory Data Management Intelligent Business Operations

Event Processing Dashboards Real-Time Insight

Integration / SOA Collaborative Process

Analysis / Management Architecture Enterprise

Event Processing

IT Portfolio Management Visualization (Presto)

Application Development

Messaging

Organic Growth sparked by Innovations

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MOBILE

CLOUD

A gi le Inte gra tion & A uto m ation

IBO Platform Components

B usi ness Pr ocess M anag e me nt A gi le A p p s

In-Memory Data Management & Connectivity

Real-time Decisions

Proactive Alerts Dashboards &

Visualization Intelligent Actions

Streaming Analytics

Streaming Analytics Historical Pattern

Discovery Real-time Complex Pattern Detection

Business Processes Mobile events Financial & News Events Social Media

$

£

_€

¥

Sensor & machines Hadoop Business Intelligence

Terracotta Big Memory & Universal Messaging

O p timi ze PP M

Apama

Presto

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Seize opportunities & avoid crises amidst explosive complexity

The need: supporting a new class of streaming,

decision-centric application requirements

Internet

Mobility

The Internet of Things

Industrial Internet Location Sensing Wearable Devices Streaming Social Media

Fast,

Big Data

Time window

to

analyze

&

act

Complexity of

Extra-Enterprise

information

Smart

decisions

Supply Chain

Logistics

CRM/CXM

Risk Mgmt

Fraud

Trading

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Offline Business Intelligence Strategic and Tactical decisions Periodic Reports Ad Hoc BI Analytics Traditional BI Statistical Analytics Data Mining Other off-line Analytics

Predictive Analytics Hadoop

Continuous Streaming

Analytics

Capture Big Data “in motion” Intelligent Business Store data “at rest” Data Mart/ Warehouse Take Action (Operational Decisions)

Need to Complement Batch-based Analytics with

Continuous & Actionable Real-time Analytics

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IBO Solution Blueprints & Customers

R ea l-ti m e Pe rs ona li za ti on Customer Experience Management End-to-End Process Assurance Business Acceleration Real time Fraud Prevention Risk & Compliance Monitoring eTrading R ea l-ti me Pro mo ti ons O mni -Channel Fulfil lment R et ai l Ba nk Pro ces s Mo ni to ri ng SA P Pro ces s Mo ni to ri ng Fa st er eC om m erce Ma inf ra me O ff lo ad A T M Fra ud Det ect io n A nt i-m oney La und eri ng Ma rket Surveil la nce R og ue T ra der Mo ni to ri ng Pre -t ra de R is k FX eC om m erce A lg ori thmi c T ra di ng

IBO Platform

IBO Solution Blueprints

Common Use Case Patterns and Solution Accelerators

Da ta ba se O ff lo ad R at ing Pro ces s Mo ni to ri ng Bo nd Pri ci ng M2M Operational Intelligence Sm art G ri d A na lytic s Energy T hef t Det ect io n M2 M Pro ces s O pt im iz at io n

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Example: Smart Shipping Logistics

Ship Movements (Sat) Ship reporting

Port Messages

Detect a ship passing a certain area, Start appropriate Real-time and historic/enriched

information on ships Real-time access to ships’ inventories and Real-time tracking of all entities, highlighting efficiencies and predicted problems Convey data reliably

from the remote ships & dock side machines

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Example: Avoid Regulatory Fines & Resolve Suspicious

Trading Activity Proactively

Unusual trading activity just before news release suggests

insider trading Notify relevant Compliance Officer Compliance staff visualize trade abuse alerts; drill in

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Enjoy 15% discount off any

main meal at Sports Bar Diner in Wellington Mall this lunchtime

Real-time, One-to-One Marketing

Example: Intelligent Mobile Marketing Offers

 Customer who likes Sports enters a Mall

 Partner “Sports Bar Diner” has capacity

 Push offer of 15% off any main meal this lunchtime

Customer location detected

entering Mall

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Large Enterprise / Public Sector Customers in 70 Countries

Finance Public Sector Chemicals/Pharma Energy/Utilities Telecom

Manufacturing Transport Logistics/

Healthcare/ Consumer Goods

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Americas

EMEA

Germany

Asia Pacific

Revenue Split – Well Balanced

Product Revenue by Region*

Product Revenue by Industry*

Public Sector Financial Sector IT

Services Associations Manufacturing

Telcos Logistics Retail

22%

19%

38%

36%

17%

8%

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Software AG Suite is a Top-Ranked Technology Leader

Application Integration Suites • • • • •

Application Services Governance • •

Business Process Analysis Tools • • •

Business Process Management Suites • • •

Enterprise Architecture Tools • •

Governance, Risk and Compliance • •

Integrated IT Portfolio Analysis Apps •

Complex Event Processing Platforms • • •

Comprehensive Integration Solutions • • • • •

EA Management Suites •

Elastic Caching Platforms • • •

ESB • • • •

Integrated SOA Governance • •

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Enterprise Digitization – Driving growth of AIM Market

Modern ESB SOA, B2B & other Modern BPMS

Addressable AIM Addressable AIM

1.1bn 1.6bn 1.2bn 2.1bn SOA, B2B & other

2014

₂₀₁₇

Tradit. ESB Tradit. _BPMS 1.5bn 1.7bn 2.1bn 1.3bn 3.0bn 0.6bn Modern ESB Modern BPMS Tradit. BPMS Tradit. ESB

2.9bn

5.1bn

21% CAGR

9% CAGR

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Business Process Management Suite

(BPMS)

Enterprise Service Bus Suite

(ESB)

Source: Source: Gartner: Market Share, All Software Markets, Worldwide, 2013, Colleen Graham et al, 28 March 2014

Market Share in Main Markets: BPSM (Process Management)

and ESB (Integration)

Software AG 11%

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Appendix

Financials

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Euro

36%

US Dollar

26%

Other

10%

GBP 6% AUD 5% ZAR 2% ILS 4% CAD 3% BRL 8%

(in €m; yoy)

Q1

2014

Q1

in %

FY

2013

FY

in %

Licenses

-3.7

-6.0%

-16.9

-5%

Maintenance

-4.9

-5.2%

-16.4

-4%

Consulting &

Other

-1.1

-1.8%

_-4.5

_-2%

Total

-9.7

-4.5%

-37.8

-4%

Currency impact on revenue

Q1 2014 / FY 2013

Currency split FY 2013

Split EUR/USD:

FY 2013: EUR 36%, USD 26%

Q1 2014: EUR 43%, USD 21%

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(in €m) Q1 2014 Q1 2013 Δ% Δ% acc ₂₀₁₃FY ₂₀₁₂ FY Δ% Δ% acc Product 147.4 157.1 -6% -1% 705.7 712.2 -1% 4% Licenses 57.1 63.6 -10% -4% 330.1 318.9 4% 9% Maintenance 90.3 93.5 -3% -2% 375.6 393.3 -5% -

Consulting & services 61.3 67.5 -9% -8% 266.0 333.3 -20% -19%

Other 0.2 0.3 -33% -33% 1.0 1.8 - -

Total 208.9 224.9 -7% -3% 972.7 1,047.3 -7% -4%

Excluding IDS (proforma)

195.1 203.9 -4% 0% 897.3 n.a. n.a. n.a.

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Segment report Q1 2014 / FY 2013

Business Process Excellence (BPE)

(in €m) Q1 2014 Q1 2013 Δ% Δ% acc ₂₀₁₃ FY ₂₀₁₂FY Δ% acc Δ% Licenses 43.7 41.9 4% 10% 220.1 194.7 13% 18% Maintenance 51.6 48.4 7% 11% 202.8 190.0 7% 11% Total revenue 95.3 90.3 6% 11% 422.9 384.7 10% 15% Cost of sales -5.7 -5.8 -2% 2% -22.4 -18.8 19% 23% Gross profit 89.6 84.5 6% 11% 400.5 365.9 9% 14%

Sales & marketing -49.1 -46.0 7% 11% -201.5 -137.3 47% 53%

R & D -20.9 -19.7 6% 7% -82.5 -74.9 10% 12%

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Segment report Q1 2014 / FY 2013

Enterprise Transaction Systems (ETS)

(in €m) Q1 2014 Q1 2013 Δ% Δ% acc ₂₀₁₃ FY ₂₀₁₂ FY Δ% acc Δ% Licenses 13.3 21.1 -37% -30% 107.4 121.3 -11% -6% Maintenance 37.6 43.2 -13% -7% 166.4 188.3 -12% -7% Product revenue 50.9 64.3 -21% -15% 273.8 309.6 -12% -7% Other 0.2 0.2 - - 0.7 0.9 - - Total revenue 51.1 64.5 -21% -15% 274.5 310.5 -12% -7% Cost of sales -3.3 -3.8 -13% -6% -14.1 -15.6 -10% -6% Gross profit 47.8 60.7 -21% -15% 260.4 294.9 -12% -7%

Sales & marketing -9.1 -13.8 -34% -31% -50.4 -61.7 -18% -15%

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©2014 Software AG. All rights reserved. 38 | (in €m) Q1 2014 Q1 2013 Δ% Δ% acc ₂₀₁₃ FY ₂₀₁₂FY Δ% acc Δ% Licenses 0.1 0.6 -83% -86% 2.6 2.9 -10% -9% Maintenance 1.1 1.9 -42% -41% 6.5 15.0 -57% 57% Product revenue 1.2 1.8 -52% -52% 9.1 17.9 -49% -49%

Services & other 61.3 67.5 -9% -8% 266.3 334.2 -20% -19%

thereof BPE/ETS 48.7 49.0 - 2% 199.7 n.a. n.a. n.a.

Total revenue 62.5 70.1 -11% -9% 275.4 352.1 -22% -20%

Cost of sales -51.9 -60.2 -14% -12% -232.6 -320.0 -27% -26%

Gross profit 10.6 9.9 7% 9% 42.8 32.1 33% 37%

Sales & marketing -7.3 -9.6 -24% -22% -33.5 -33.8 -1% 3%

Segment result 3.3 0.3 - - 9.3 -1.7 >100% >100%

Segment report Q1 2014 / FY 2013

Consulting

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44 Results Q1 2014 / FY 2013

(in €m) Q1 2014 Q1 2013 Δ% FY 2013 FY 2012 Δ% Δ% acc Total revenue 208.9 224.9 -7% 972.7 1,047.3 -7% -4% Cost of sales -68.0 -75.8 -10% -294.6 -378.4 -22% -21% Gross profit 140.9 149.1 -5% 678.1 668.9 1% 6% Margin in % 67.4% 66.3% 69.7% 63.9% R & D -27.2 -26.2 4% -107.9 -101.1 7% 8%

Sales & marketing -69.4 -72.8 -5% -300.1 -246.9 22% 26%

Administration -19.1 -17.8 7% -73.2 -75.8 -3% -2%

Other

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Operating Results (Non-IFRS) Q1 2014 / FY 2013

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* Based on average outstanding shares: Q1 2014: 86.9m / Q4 2013: 82.2m / Q4 2012: 86.8m // FY 2013: 83.7m / FY 2012: 86.8m

(in €m) Q1 2014 Q1 2013 FY 2013 FY 2012

EBIT (before all taxes) 30.5 41.6 205.5 248.3

Amortization on acquisition related

intangible assets 11.1 9.4 40.4 38.1

EBITA 41.5 51.0 245.9 286.4

Reduction acquisition related product

revenue by purchase price allocation 0.3 - 1.2 1.0

Other acquisition impacts -2.7 -3.0 1.7 0.6

Share based payment 1.5 -0.6 -0.7 7.9

Restructuring/severances 2.3 1.5 12.6 3.0

Operating Result (Non-IFRS) 43.0 48.9 257.6 298.9

in % of revenue (Non-IFRS) 20.6% 21.7% 26.8% 28.5%

NOPAT (Non-IFRS) 27.7 32.4 172.9 200.7

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Cash flow Q1 2014 / FY 2013

(in €m) Q1 2014 Q1 2013 Δ% FY 2013 FY 2012 Δ%

Operating cash flow 50.1 65.4 -23% 171.8 184.4 -7%

./. CapEx* -2.3 -2.7 -12.7 -13.7

Free cash flow 47.8 62.7 -24% 159.1 170.7 -7%

as % of revenue 22.9% 27.9% 16.4% 16.3%

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©2014 Software AG. All rights reserved. 42 | 105.9 March 31, 2014 March 31, 2014 1,935.9 1,935.9 480.7 281.9 94.4 1,078.9 612.9 268.2 138.2 916.6

Cash and cash equivalents/ Securities Trade receivables Inventory, other assets Fixed assets (goodwill 820.7/829.2) Total Financial liabilities Other liabilities Deferred income Shareholders equity (ratio 47.4%/48.4%) Total

Assets

Liabilities

Balance sheet

(in €m) Dec. 31, 2013 Dec. 31, 2012 1,996.9 613.4 309.9 108.0 965.6 1,996.9 506.5 323.2 57.3 1,109.9 951.5 1,680.7 277.4 345.9 Dec. 31, 2013 1,069.2 216.5 317.9 77.1 1,680.7 Dec. 31, 2012

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Earnings IFRS Q1 2014 / FY 2013

(in €m) Q1 2014 Q1 2013 Δ% FY 2013 FY 2012 Δ%

EBIT (before all taxes) 30.5 41.6 -27% 205.5 248.3 -17%

Financial result -2.9 -1.3 123% -8.4 -8.8 -5%

Profit before taxes 27.6 40.3 -32% 197.1 239.5 -18%

Other taxes -1.6 -1.8 -11% -7.1 -8.0 -11%

Income taxes -7.4 -11.3 -35% -56.0 -66.8 -16%

Tax rate in % 32.6% 32.5% 32.0% 31.2%

Net Income 18.6 27.2 -32% 134.0 164.7 -19%

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44 |

Amortization / depreciation impact 2014ff (preliminary)

* Estimated Amortization IDS (in €m) Amortization other Depreciation Q1 2014 2.7 8.3 3.0 24.0 11.6 FY 2015ff* 7.8 FY 2014 10.6 29.0 11.6 FY 2013 10.6 29.8 12.9

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**Headcount by functional areas* and geography**

(in FTE) Mar.31,

2014

Dec.30, 2013

Δ%

qoq Mar. 31, ₂₀₁₃ yoy Δ%

Total 5,108 5,238 -2% 5 5,300 -4%

Consulting & services 2,283 2,347 -3% 2,456 -7%

R & D 995 998 - 901 10%

Sales & marketing 1,131 1,180 -4% 1,213 -7%

Administration 699 713 -2% 730 -4%

USA 752 778 -3% 729 3%

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46 |

*Source: ThomsonOne, January 2014



Number of total shares: 86,943,945



Freefloat: ~ 62%



Indices: TecDAX, DAX 100, TechAllShare



Codes: SOW, SOW GR, SOWG.DE



ISIN: DE0003304002



ADR U.S. trading symbol: STWRY

Share Data

Major Institutional Investors

Shareholder Structure

Institutional Investors by Region*

Software AG Foundation Institutional Investors Private & undisclosed

25% 29% 37% 30% 23% 14% 8% 12% Germany US UK Scandinavia France Rest of World 7% Own Shares** 9% **as of February, 2014

Fidelity (FMR LLC)

3.5%

Deutsche Asset & Wealth

3.3%

Templeton

3.0%

Alken

2.9%

Deka

2.9%

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Follow us on Twitter: @SoftwareAG_IR Investor Relations Uhlandstrasse 12 64297 Darmstadt Germany phone: +49 (0) 6151 / 92 1900 fax: +49 (0) 6151 / 9234 1900 softwareag.com e-mail: [email protected]