INTRODUCING

SOFTWARE AG

2017 ANNUAL REPORT

INTRODUCING

SOFTWARE AG

IMAGE AND STRATEGY BROCHURE
Independent Connected Trusted

This Is What We Do

Our customers’ success is our success.

Software AG helps customers master their digital transformation with products that reflect decades of expertise in software development. Software AG’s Digital Business Platform enables organizations to better interact with their customers, enhance their business models and capitalize on new markets. Software AG also offers leading Internet of Things (IoT) solutions to integrate, connect and manage IoT components as well as to analyze data and predict future events based on artificial intelligence.

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Software AG at a Glance

As of December 31, 2017

879.0

million
TOTAL REVENUE

operates in more than 70 countries

Serving customers
in more than
70

COUNTRIES

New Record

31.8%

OPERATING PROFIT MARGIN
(EBITA, non-IFRS)

Sales partners

PARTNER ECOSYSTEM

More than 400

Partners

College hat

PARTNERSHIPS
With more than

1,650

UNIVERSITIES

Sales Partners

4,596

EMPLOYEES
+3 percent year-on-year

Karl-Heinz Streibich, CEO, Software AG

An Interview with the CEO

Karl-Heinz Streibich

One of the most daunting challenges of our time—both for business and society as a whole—is digital transformation. Karl-Heinz Streibich, CEO of  Software AG, talks about the digital sector's disruptive mega trends, digital transformation and the role of Software AG.

Read the Interview (PDF)
CSR

Sustainable Engagement

Corporate Social Responsibility (CSR)

Corporate Social Responsibility means genuine appreciation for responsible and sustainable action. Values such as trust, respect, sincerity and transparency are therefore of utmost priority. We have been applying these principles for many years to our relationships with customers, to our technology, to our partnerships, to investments in our company, and in educating our employees.

2017 Non-Financial Statement (PDF)

The Management Board's Outlook

It is time for traditional companies to seize the opportunities of digitalization.

Karl-Heinz Streibich (CEO)

Karl-Heinz Streibich, Chief Executive Officer

"The Internet of Things and Industry 4.0 are some of the strongest growth engines of the digital economy. This presents some enormous opportunities—especially for traditional companies. If they seize them, they can become digitalization winners. But there are two key conditions: The willingness to win back any software expertise that may have gotten lost to outsourcing and reestablish digital positions within the organization. And, they must have the courage to begin now. As market leader, Software AG offers customized software solutions to do this. We will continue to play an active role in shaping digital transformation across all market sectors and national borders in 2018."

Arnd Zinnhardt (CFO)

Arnd Zinnhardt, Chief Financial Officer

"Software AG has always stood for sustainable, profitable growth. We will continue that strategy in fiscal 2018. And, thanks to our rock-solid financial foundation, we are positive about what’s to come. Our market activities are resulting in extremely encouraging revenue, cash flow and earnings. Thanks to the strategic acquisition of critical key technologies, we also find ourselves in an excellent position to react quickly to dynamic market developments and secure our technology leadership. We will continue our success this year with growth, innovation and concerted process optimization."

Eric Duffaut (CCO)

Eric Duffaut, Chief Customer Officer

"We put our customers at the center of everything we do: from co-innovation on software development to how we engage and serve them. “Customer centricity” is not a tag line; it is a mindset, a culture. Our success is measured by the success of our customers and partners. This is reflected in the growing loyalty of our long-term Adabas & Natural customers and the adoption of our Digital Business Platform by leading global companies across all industries. Our ground-breaking IoT partnerships with companies like Huawei, Deutsche Telekom, Bosch, Octo, Coupa, Dürr, ADAMOS and Siemens are further testament that we have what it takes to help customers make the world simpler, smarter and stronger."

Dr. Wolfram Jost (CTO)

Dr. Wolfram Jost, Chief Technology Officer

"The Internet of Things, artificial Intelligence, blockchain, digital twins, edge computing: digital technologies are the raw material of tomorrow’s innovation. Software platforms like our Digital Business Platform (DBP) unite them and provide the foundation for digital transformation in every enterprise. Software AG will therefore further drive its leadership in this market in 2018 and pursue its goal of equipping customers for future challenges associated with digital transformation. Software AG is well positioned to do this as a hardware and application-neutral vendor with roots in application infrastructure and middleware."

DR_Stefan_Sigg_profile_image_250x250

Dr. Stefan Sigg, Chief Research & Development Officer

"To Software AG, innovative power and operational excellence are the cornerstones of successful research and development. Partnerships with the world’s leading research institutes and universities as well as our Scientific Advisory Board heighten our awareness of current trends. Our numerous co-innovation projects with customers ensure that we always address real needs. We will therefore focus primarily on cloud computing, machine learning and the Internet of Things in 2018. These are three pivotal technologies that will guide organizations into the world of new data-driven business models."
Management Board

Outlook 2018

In the new fiscal year 2018, we will continue on our proven course and strive for even greater successes. We laid the foundations for dynamic, profitable growth in the IoT and Industry 4.0 sectors in 2017. We will account for the IoT and cloud business separately for the first time in 2018. Due to the strong demand, we anticipate revenue growth here of 70 to 100 percent at constant currency. Our traditional DBP business—without IoT and cloud activities—will also continue to grow in the coming year. For this segment, we predict growth between 3 and 7 percent at constant currency. Thanks to the strong loyalty of our customers, we also anticipate merely a moderate decline in the A&N business line of 2 and 6 percent. In addition, the operating profit margin (non-IFRS) is expected to be between 30.0 and 32.0 percent according to our annual forecast for 2018.



As a sign of our long-term business success and our value orientation, the Management Board and Supervisory Board will propose a dividend increase to €0.65 per share. Share buyback programs will remain a potential component of our strategy as well.



On behalf of the entire Management Board, I would like to thank you, our shareholders, for your trust and loyalty. Let’s shape the digital transformation together again in 2018—with determination and passion for our customers and a successful digital future!

Yours sincerely,



Karl-Heinz Streibich
Chief Executive Officer

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