SOFTWARE AG THE NEW GROWTH DRIVER KEPLER CHEUVREUX ROADSHOW HELSINKI / STOCKHOLM MAY 3-4, Software AG. All rights reserved.

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1 SOFTWARE AG THE NEW GROWTH DRIVER KEPLER CHEUVREUX ROADSHOW HELSINKI / STOCKHOLM MAY 3-4, 2018

2 SAFE-HARBOR-STATEMENT This presentation includes forward-looking statements based on the 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. This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of Software AG or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. This presentation does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities Act of 1933 in its currently valid form. 2

3 SOFTWARE AG AT A GLANCE Technology leader for more than 40 years in data management and application development platforms 870+ MILLION IN REVENUE 50%+ recurring 75% product revenue Operating margin* expansion 31.8% 31.2% 29.7% 27.9% 26.8% FY2014 FY2013 FY2015 FY 32 35% (2020 target) FY2016 * non IFRS EBITA in % of revenue 4,500+ EMPLOYEES** Consulting &Services 42% Admin 13% R&D 26% S&M 19% ~ 3bn MARKETCAP ~ 66% Free Float **P&L as of December 31, 3

4 BUSINESS LINES Digital Business / Platform IoT / Cloud Adabas & Natural Consulting Services Integration & IoT solutions Application Development Strategy & Design Automation Industry 4.0 platform Data Management System Product Implementation & Real-time Analytics & Decisions In-Memory Data Business & IT Device Management Edge Computing Cloud based software Modernization System Support Customized Solutions Education & Cloud Services Global Delivery (on-/offshore) Transformation Share of Revenue* 52% Share of Revenue* 25% Share of 23% Revenue* *Group revenue split FY 4

5 OUTLOOK FULL YEAR 2018 FY (in m) FY 2018 Outlook (as of April 13, 2018) DBP Total Revenue - DBP excl. IoT / Cloud - IoT / Cloud N/A % to +7% 1) % to +135% 1) Adabas & Natural Operating Margin Group (EBITA non-ifrs) 2) EPS non-ifrs 3) % % to -2% 1) 30% to 32% +5% to +15% 1) At constant currency rates 2) Adjusted for non-operating items (see non-ifrs earnings results) 3) Weighted average shares outstanding (basic/ias 33.19) FY : 74.6m / FY 2018: 74.0m; based on new US-Federal-Tax and Euro/US-Dollar exchange rate of 1/1.18 5

6 DATA CENTERED ERA REQUIRES SOFTWARE CENTRICITY Entering the next computing cycle which is centered on data Source: Morgan Stanley Research, The Data Era Becomes Investable, April 9, 2018 Source: industry interviews Bain & company, Software AG is ready to reap proceeds from higher IT investments by providing a comprehensive workbench along the value IT chain. Software AG has singled out a distinct area of growth in (industrial) IoT to leverage its capabilites to the next level. 6

7 MANUFACTURING, LOGISTICS AND UTILITIES LEADING THE WAY BUT SIGNIFICANT GROWTH ALSO IN B2C, RETAIL AND OTHER Product Revenue by Industry* 12% 20% 4% 5% 10% 19% 12% 18% Government IT Services Services Transp. & Log. Financial Services Manufacturing Telco & Media Other 7

8 ESSENTIAL CAPABILITIES TO SUCCEED IN IOT Artificial Intelligence Big Data & Streaming Analytics Edge Computing IoT Machine Learning Device Connectivity Blockchain 8

9 SOFTWARE AG IOT PLATFORM CAPABILITES ACQUISITIONS TO CATER THE IOT NEEDS IoT Acquistions Strategic decision for IoT Big Data & Streaming Analytics Machine Learning Device Connectivity Blockchain Artificial Intelligence Edge Computing 9

10 MARKET AWARENESS OF LEADERSHIP IS BUILDING UP BEST IOT TECHNOLOGY PARTNER IN THE MARKET The Forrester Wave : HYBRID INTEGRATION (SAG WebMethods) The Forrester Wave : IN MEMORY DATA GRID (SAG Terracotta) The Forrester Wave : STREAMING ANALYTICS (SAG Apama) IoT Solutions (SAG Cumulocity*) *Cumulocity is the IoT solution portfolio of Software AG encompassing Hybrid Integration, In-Memory Computing and Streaming Analytics 10

11 SOFTWARE AG DRIVES ECONOMIC VALUE THROUGH DBP CLIENTS ENDORSE TO VALUE PROPOSITION* Forrester created a composite Organization to describe the Total Economic Impact of the DBP Benefits PV (3yrs) ~ 6m NPV(3yrs) ~ 4.5m ROI 320% Payback period < 6months Incremental revenue contribution (gross profit) Productivity improvements for developers IoT connectivity solution benefits Better business insights with streaming & predictive analytics Investment in SaaS DBP Labor to deploy & maintain platform SaaS subscription fees for platform Compelling business case proposition Raises confidence for payback period limited Risk-adjusted calculation scheme reflect realistic expectations as they represent the expected value considering risk *A Forrester Total Economic Impact TM Study of the Software AG Digitial Business Platform, April 2018; purpose of the study is to provide readers with a framework to evaluate to potential finanical value of the DBP on their organizations 11

12 ESSENTIAL CAPABILITIES TO SUCCEED IN IOT Artificial Intelligence Big Data & Streaming Analytics Edge Computing IIoT Predictive Maintenance Machine Learning Device Connectivity Blockchain 12

13 SOFTWARE AG S SUCCESS STORIES IN IOT IOT ECOSYSTEMS INDUSTRY 4.0, TELCOS, AUTOMOTIVE, Forging joint venture of leading machinery manufactures for Industry 4.0 Transforming auto insurance through behavioral, contextual and driving analytics Strengthening Mindsphere platform across industries enabling powerful industry applications Enabling customers to use geo-sensing alerts, reduce theft and anticipate maintenance needs Leveraging Bosch IoT Cloud platform with Realtime predictive analytics technology KPN (NL), Telstra (AUS), Telia (SWE), Reliance Communications (India), Japan s NTT (Japan), Deutsche Telekom (T-Systems), Nokia and Huawei. 13

14 RESULTS 1 st QUARTER 2018 (IFRS, UNAUDITED) April 19, 2018

15 REVENUE Q (in m) Q Q1 % % acc Product revenue % -1% Licenses % -17% Maintenance % 4% SaaS / Usage Based % 113% Consulting % -8% Other Total % -2% Segment result 15

16 CURRENCY IMPACT ON REVENUE Q % revenue in Euro 64% revenue in foreign currency CAD 3% AUD 4% BRL 5% Other 14% Euro 36% Currency impact on revenue (in m; yoy) Q Q1 in % Licenses % ILS 5% GBP 5% US Dollar 28% Currency split Q Maintenance % SaaS % Consulting & Other % Total % 16

17 DBP PRODUCT REVENUE SEASONALITY SHARE OF ANNUAL REVENUE IN THE QUARTERS 35% 30% % 20% 21.1% 21.4% 23.2% 20.4% 15% 10% 5% 0% Q1 Q2 Q3 Q4 17

18 DIGITAL BUSINESS PLATFORM (INCLUDING IoT/CLOUD) SEGMENT REPORT Q (in m) Q Q1 % % acc Licenses % -25% Maintenance % 8% SaaS / Usage Based % 113% Total revenue % -2% Cost of sales % 23% Gross profit % -4% Sales & Marketing % -9% Research & Development % 1% Segment result % 1% Margin in % 27.9% 28.3% ARR (Annual Recurring Revenue) % 14%* * Internal Plan Rate 2018 used

19 IoT / CLOUD BUSINESS SEGMENT REPORT Q (in m) Q Q1 % % acc Licenses % 178% Maintenance % 95% SaaS / Usage Based % 113% Total revenue % 125% ARR (Annual Recurring Revenue) % 81%* * Internal Plan Rate 2018 used 19

20 ADABAS & NATURAL SEGMENT REPORT Q (in m) Q Q1 % % acc Licenses % 23% Maintenance % -2% Product revenue % 2% Other Total revenue % 2% Cost of sales % -45% Gross profit % 5% Sales & Marketing % -17% Research & Development % -7% Segment result % 13% Margin in % 69.6% 64.6% 20

21 CONSULTING SEGMENT REPORT Q (in m) Q Q1 % % acc Total revenue % -8% Cost of sales % -6% Gross profit % -14% Sales & Marketing % -7% Segment result % -22% Margin in % 9.1% 10.6% 21

22 RESULTS Q (in m) Q Q1 % % acc Total revenue % -2% Cost of sales % -6% Gross profit % -1% Margin in % 73.5% 73.3% Research & Development % 0% Sales & Marketing % -11% Administration % -3% Other income / expense EBIT % - Margin in % 22.6% 20.2% 22

23 EARNINGS Q (in m) Q Q1 % EBIT (before all taxes) % Financial result Profit before taxes % Other taxes % Income taxes % Tax rate in % 31.1% 33.9% Net income % EPS in * % * Weighted average shares outstanding (basic) Q1 2018: 74.0m / Q1 : 75.9m 23

24 NON-IFRS EARNINGS Q (in m) Q Q1 % EBIT (before all taxes) % Amortization on acquisition related intangible assets Share based payments Restructuring / severances / legal case Other impacts / impacts from M&A activities EBITA (non-ifrs) % in % of revenue (Non-IFRS) 27.4% 27.3% Net income (non-ifrs) % EPS in (non-ifrs)* % * Weighted average shares outstanding (basic) Q1 2018: 74.0m / Q1 : 75.9m 24

25 CASH FLOW Q (in m) Q Q1 % Operating cash flow %./. CapEx* ** Free cash flow % in % of revenue 32.2% 21.0% Free cash flow per share*** % * Cash flow from investing activities except acquisitions and except investments in debt instruments ** yoy change because of one time property investment at Darmstadt *** Based on weighted average shares outstanding (basic) Q1 2018: 74.0m / Q1 : 75.9m 25

26 BALANCE SHEET (in m) Mar. 31, 2018 Assets Dec. 31, Mar. 31, 2018 Liabilities Dec. 31, Cash and cash equivalents Financial liabilities Financial assets Trade and other receivables Non-financial assets Other liabilities Deferred income ,106.3 Fixed assets (Goodwill / 921.4) 1, ,115.4 Shareholders equity (ratio 60.9% / 58.6%) 1, ,832.7 Total 1, ,832.7 Total 1,

27 OUTLOOK FULL YEAR 2018 FY (in m) FY 2018 Outlook (as of April 13, 2018) DBP Total Revenue - DBP excl. IoT / Cloud - IoT / Cloud N/A % to +7% 1) % to +135% 1) Adabas & Natural Operating Margin Group (EBITA non-ifrs) 2) EPS non-ifrs 3) % % to -2% 1) 30% to 32% +5% to +15% 1) At constant currency rates 2) Adjusted for non-operating items (see non-ifrs earnings results) 3) Weighted average shares outstanding (basic/ias 33.19) FY : 74.6m / FY 2018: 74.0m; based on new US-Federal-Tax and Euro/US-Dollar exchange rate of 1/

28 RESULTS 4 th QUARTER (IFRS, UNAUDITED) January 25, 2018 Arnd Zinnhardt, CFO

29 REVENUE Q4 / FY (in m) Q4 Q % % acc FY FY 2016 % % acc Product revenue % 8% % 2% Licenses % 14% % 0% Maintenance % 2% % 3% Consulting % 0% % 2% Other Total % 7% % 2% Segment result 6.2 7%

30 CURRENCY IMPACT ON REVENUE Q4 / FY 34% revenue in Euro 66% revenue in foreign currency AUD 3% ZAR 3% BRL 4% ILS 4% GBP 6% Other 15% US Dollar 31% Euro 34% Currency impact on revenue (in m; yoy) Q4 Q4 in % FY FY in % Licenses % % Maintenance % % Consulting & Other % % Total % % Currency split FY 30

31 DIGITAL BUSINESS PLATFORM SEGMENT REPORT Q4 / FY (in m) Q4 Q % % acc FY FY 2016 % % acc Licenses % 6% % 3% Maintenance % 6% % 6% Total revenue % 6% % 5% Cost of sales % 34% % 8% Gross profit % 4% % 5% Sales & Marketing % 0% % 2% Research & Development % 9% % 6% Segment result % 5% % 7% Margin in % 39.7% 41.1% 33.1% 33.5% 31

32 ADABAS & NATURAL SEGMENT REPORT Q4 / FY (in m) Q4 Q % % acc FY FY 2016 % % acc Licenses % 37% % -6% Maintenance % -3% % -3% Product revenue % 14% % -4% Other % 5% % -1% Total revenue % 14% % -4% Cost of sales % -7% % -12% Gross profit % 15% % -3% Sales & Marketing % -24% % -11% Research & Development % 1% % 5% Segment result % 28% % -3% Margin in % 74.6% 66.9% 70.0% 69.2% 32

33 CONSULTING SEGMENT REPORT Q4 / FY (in m) Q4 Q % % acc FY FY 2016 % % acc Total revenue % 1% % 2% Cost of sales % 5% % 0% Gross profit % -15% % 14% Sales & Marketing % 6% % 10% Segment result % -31% % 17% Margin in % 8.3% 12.4% 11.9% 10.6% 33

34 RESULTS Q4 / FY (in m) Q4 Q % % acc FY FY 2016 % % acc Total revenue % 7% % 2% Cost of sales % 9% % 1% Gross profit % 6% % 2% Margin in % 78.4% 79.4% 75.7% 75.7% Research & Development % 10% % 8% Sales & Marketing % -5% % 0% Administration % -6% % -4% Other income / expense EBIT % % - Margin in % 30.8% 28.5% 25.3% 24.5% 34

35 EARNINGS Q4 / FY (in m) Q4 Q % FY FY 2016 % EBIT (before all taxes) % % Financial result Profit before taxes % % Other taxes % % Income taxes % % Tax rate in % 43.0% 31.5% 37.3% 33.0% Net income % % EPS in * % % * Weighted average shares outstanding (basic) Q4 : 74.0m / Q4 2016: 76.2m / FY : 74.6m / FY 2016: 76.2m 35

36 NON-IFRS EARNINGS Q4 / FY (in m) Q4 Q % FY FY 2016 % EBIT (before all taxes) % % Amortization on acquisition related intangible assets % % Share based payments % % Restructuring / severances / legal case % % Other impacts / impacts from M&A activities % % EBITA (non-ifrs) % % in % of revenue (Non-IFRS) 36.7% 34.2% 31.8% 31.2% Net income (non-ifrs) % % EPS in (non-ifrs)* % % * Weighted average shares outstanding (basic) Q4 : 74.0m / Q4 2016: 76.2m / FY : 74.6m / FY 2016: 76.2m 36

37 CASH FLOW Q4 / FY (in m) Q4 Q % FY FY 2016 % Operating cash flow % %./. CapEx* ** Free cash flow % % in % of revenue 15.1% 15.8% 18.4% 21.4% Free cash flow per share*** % % * Cash flow from investing activities except acquisitions and except investments in debt instruments ** yoy change because of one time property investment at Darmstadt *** Based on weighted average shares outstanding (basic) Q4 : 74.0m / Q4 2016: 76.2m / FY : 74.6m / FY 2016: 76.2m 37

38 BALANCE SHEET (in m) Dec. 31, Assets Dec. 31, 2016 Dec. 31, Liabilities Dec. 31, Cash and cash equivalents Financial liabilities Financial assets Trade and other receivables Non-financial assets Other liabilities Deferred income ,125.9 Fixed assets (Goodwill / 936.6) 1, ,118.3 Shareholders equity (ratio 58.6% / 61.1%) 1, ,907.5 Total 1, ,907.5 Total 1,

39 SHAREHOLDER STRUCTURE OWNERSHIP REGIONAL SPLIT* Software AG Foundation Own Shares (0.03%) Institutional Investors Private Investors 33.3% 61.7% 17.5% 28.2% 32.4% Germany North America Continental Europe (excl. Germany) UK & Ireland 21.4% Rest of World Share Info Number of total shares: 74,000,000 Thereof Free Float: ~ 66% Number of shares outstanding: ~ 74m Registered shares since Oct. 2, Share Data SOW, SOW:GR, SOWGn.DE ISIN: DE000A2GS401 ADR symbol: STWRY Indices: TecDAX, DAX100, TechAllShare Major Institutional Shareholders according to notification of voting rights above 3% threshold of shares outstanding Deutsche Asset Mgt. Investment 4.91% Axxion S.A. 3.30% *institutional investors based on public files, May

40 CASH USE: SHARE BUY-BACK Buy-back own shares Buy-back own shares 2015 Sept. 8 -Dec. 4, 2015 Buy-back own shares March 13 -May 11, Own shares Since March 27, 2018 Cancellation of treasury shares April 30, 2015 Cancellation of treasury shares March 14, Cancellation of treasury shares March 27, m 9.2% 70m 3.4% -3.29% 89m 3.266% -3.14% 0.03% - 9.1% Until cancellation/cap. reduction: Share capital: 86,943, Number of shares: 86,943,945 Until cancellation/cap. reduction: Share capital: 79,000, Number of shares: 79,000,000 Since cancellation/cap. reduction: Share capital: 76,400, Number of shares: 76,400,000 Since cancellation/cap. reduction: Share capital: 74,000, Number of shares: 74,000,000 40

41 CASH RETURN TO SHAREHOLDERS Ø ¾ FREE CASH FLOW TURNS INTO DIVIDENDS AND SBB 250 m 200 Free Cash Flow Share Buy-Back + Dividends * * Dividend recommendation, subject to the agreement at the Annual General Meeting in May

42 APPENDIX 42

43 ARR IOT / CLOUD DEVELOPMENT (NET OF CURRENCY*) STATUS Q Prior Quarter 27% 15 20% 10 13% 6% Subscription License Maintenance SaaS TOTAL ARR 5 *Internal Plan Rate 2018 used 0 43 Q1 Q2 Q3 Q4 Q1 2018

44 HEADCOUNT BY FUNCTIONAL AREAS* AND GEOGRAPHY (in FTE) Mar. 31, 2018 Dec. 31, % Mar. 31, % yoy Total 4,610 4,596 0% 4,486 3% Consulting & Services 1,938 1,935 0% 1,891 2% Research & Development 1,197 1,176 2% 1,122 7% Sales & Marketing % 863 1% Administration % 610 0% Germany 1,210 1,201 1% 1,141 6% USA % India % 764 6% Rest of world 2,012 1,997 1% 1,982 2% * According to P+L structure 44

45 ALLOCATION OF CLOUD HOSTING REVENUE NEW: WITHIN IoT/CLOUD REVENUE LINE (ADJ. FY ) DBP FY (reported) 455.3m Adj. DBP FY 456.4m (incl. Hosting) Consulting FY (reported) 199.9m Adj. Consulting FY 198.8m (excl. Hosting) Cloud Hosting Revenue Q1 Q2 Q3 Q4 FY ( m)

46 IoT / CLOUD REVENUE SPLIT FOR In m Q1 Q2 Q3 Q4 FY License Maintenance SaaS* IoT / Cloud Revenue * Incl. Cloud Hosting Revenue 46

47 AMORTIZATION / DEPRECIATION IMPACT (PRELIMINARY) (in m) Q FY 2018* FY 2019* FY 2020* Amortization Depreciation * Estimated 47

48 Investor Relations Uhlandstrasse Darmstadt Germany T: +49 (0) 6151 / F: +49 (0) 6151 / W: softwareag.com E: investor.relations@softwareag.com 48

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