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Software AG GB 2013. englisch

GroupManagementReport After a year of intense investing, we seek to exploit further optimization potential, economies of scale and efficiency advantages in order to convert our investments into revenue and increase the Group’s earnings. Thanks to its expanded innovative product portfolio, its ever more global position in high-growth markets and its highly qualified staff, Soft- ware AG has the opportunity to gain additional market share and evolve from technology leader to market leader as part of its focused growth strategy. General statement on the Group’s risk situation Management’s assessment of the ­Company’s risk situation An overall view indicates that risks in the Software AG Group are limited and manageable. No risks can be identified that are likely to jeopardize the going concern of the Company now or in the future. Company rating The need for a formal external rating is eliminated due to Software AG’s solid financial structure and employed financ- ing instruments. Nevertheless, there are some facts that shed light on Software AG’s external rating. Based on the financial statements from December 31, 2012, Software AG was given central bank eligibility by the German Central Bank (Deutsche Bundesbank). This means that lending banks can use credit claims with Software AG as collateral for refinancing with the Deutsche Bundesbank. Software AG’s own banks classified its creditworthiness as investment-grade at the end of 2013. A leading ratings agency arrived at a similar conclusion as part of an analysis of the financial and business risk profiles of a selection of German medium-sized companies. Business and operating risks We are positioned in high-growth markets with the BPE segment. In the past few years we have succeeded in grow- ing the BPE business line into our primary source of revenue. This laid the groundwork for exploiting the potential of mega­trends and achieving profitable growth. At the same time, our above-average growth in the product business offers the opportunity of a higher level of profitabil- ity. For this reason, we pursue a strategy of sustainably op- timizing our revenue mix by raising the percentage of high- growth BPE product revenue significantly above 80 percent by the year 2018. In order to always maintain a state-of-the-art product port- folio, R&D expenses will continue to be considerable. This ensures that our solutions meet the needs of customers and reach a broader market as well as broader user bases within organizations. Expanding our Sales and Marketing teams increases opportunities for realizing ever larger deal sizes, as occurred in fiscal 2013. In addition to our own sales force, we will continue to step up our partner network, which was expanded in 2013 in order to further raise the percentage of revenue and earnings through that channel. Software AG’s global position provides the opportunity of early participation in market and technology developments in various regions. Our goal here is to assume a market-lead- er position in the countries in which we are represented in order to increase the probability of securing orders. Our M&A management is based in the Silicon Valley because of the key importance of the U.S. IT market. That offers the oppor- tunity for us to recognize trends early and leverage the innovative potential of this IT hub. Furthermore, our new U.S. subsidiary, Software AG Government Solutions, estab- lished in 2013, gives us access to large business contracts with the public sector. Major opportunities are offered by the cross-selling potential of BPE products in the ETS business line. 107 Corporate Governance Report of the Supervisory Board Consolidated Financial Statements Notes Additional Information Group Management Report Business and General Conditions Economic Report Events after the Balance Sheet Date Risk and Opportunity Report Remuneration Report Forecast Takeover-Related Disclosures Statement on Corporate Governance

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