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Software AG GB 2013. englisch

GroupManagementReport Cash flow management Receivables management has a significant effect on cash flow. At Software AG, receivables management is conducted locally and is subject to a variety of internal control process- es. In order to improve our receivables structure, we selec- tively sell certain accounts receivable. Software AG’s cash management, in contrast, is a centralized function for which we use a global, standardized cash management system. This enables us to optimize our investment strategy and minimize investment risk. Financial objectives Following a year of transformation during which we proved our ability to adapt and innovate, we announced our next major milestone at the beginning of 2013. By 2018 we want our process and integration business together with big data solutions to account for 80 percent of total product revenue. This means annual growth between 10 and 20 percent—in just the BPE segment alone. Non-financial objectives We will focus on the opportunities that a Digital Enterprise offers customers in the upcoming years through the inter- play between the four mega trends, big data, cloud, mobile and social. These trends will be the critical engines of growth in the software sector. The five acquisitions from the year under review are a key component of this strategy. Our long-term vision is to evolve into a global market leader in infrastructure software. We will propel this growth with our own efforts, but will not limit ourselves to that. We are prepared to make additional selective investments in inno- vation-driven businesses that will strengthen our technology leadership and boost our market share. Our ETS business line provides us with a highly profitable base and the flex- ibility to invest in visionary markets of the future. Further- more, this segment gives us access to an established cus- tomer base that holds promising sales potential for new products. Revenue and earnings monitoring We continuously monitor revenue and costs in the areas of licenses, maintenance and services. License revenue is the key growth driver of maintenance and services revenue. For this reason, the development of license revenues over time is closely watched by all levels of management. We also employ a multidimensional matrix structure to con- tinuously monitor changes in EBITA for every profit and/or cost center. The matrix is divided according to business lines and revenue types and, within the business, by region. Fur- thermore, we constantly observe the operating income of our service business with respect to specific projects, from the time a quote is prepared through to project conclusion. One of our most important goals is the ongoing improve- ment of sales efficiency, which we achieve through more highly qualified employees, smoother global processes and growing project volumes. Our interregional sales and service structure offers significant additional potential. Cost management All cost items in the Group are subject to stringent budget control. On a monthly basis we review the individual profit and cost centers to determine whether budgets were ad- hered to and how forecast costs evolved. We use a dynamic budget model, ensuring that key components of the cost budget remain flexible in relation to sales growth. We adjust the cost budget dynamically throughout the year in order to achieve or surpass our profit targets. Management of research and development Software AG’s long-term business success as a software product provider is based on technology acquisitions, re- search and development (R&D) and the resulting innova- tions. We therefore continuously develop our portfolio by considering the needs of our customers and business. To this end, we calculate the profit contribution of our products on an ongoing basis. We optimize our utilization of resources by combining purchases of technology with in-house devel- opment and by striving to maintain a balanced mix of high- wage and low-wage product development centers. 69 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