Software AG: Software AG issues its guidance for fiscal 2021

Darmstadt (pta004/27.01.2021/01:35 UTC+1) Public disclosure of inside information according to article 17 MAR

Software AG issues its guidance for fiscal 2021

With double-digit bookings growth and progress in the Group's subscription shift ahead of expectations, 2020 investments were driving strong business momentum and sustained growth. Therefore Software AG will pull-forward planned investment into 2021 to underpin the accelerated transformation. The early introduction of these investments, particularly in go-to-market, customer success, operational technology and people & culture, is a key driver of the Group's confidence to deliver sustainable profitable growth towards and beyond the mid-term.

Based on the expectations of business performance for 2021, Software AG's Management Board provides the following outlook (at constant currency):

o Digital Business Bookings year-on-year growth of +15 to +25 percent
o Adabas & Natural Bookings year-on-year growth of -30 to -20 percent
o Total Product Revenue year-on-year growth of 0 percent to +5 percent
o Operating Margin (EBITA Non-IFRS) of 16 percent to 18 percent (stated figure)

The Group's overall 2021 outlook assumes a global COVID-19 recovery in the second half of the year and a gradual return to more normal trading conditions.

Over the mid-term the Group remains confident in achieving its 2023 ambitions of EUR 1bn Group revenue, 25 percent to 30 percent operating margin, 85 percent to 90 percent recurring product revenue and around 15 percent Digital Business CAGR in 2023. This confidence is backed by recent investments delivering sustained organic double-digit bookings growth in 2020 and the visibility the Group has into the benefits of the accelerated shift to subscription creating value in the upcoming years of the transformation.

Highlights for Q4 and FY 2020 (at constant currency; details in today's press release)

These results show the current status of the transformation and underline the company's guidance for 2021 as well as its confidence to achieve the 2023 ambitions.

Four consecutive quarters of double-digit Group bookings growth
* Group bookings growth of 31 percent in Q4 and 24 percent for the full year

Digital Business Lines and A&N bookings growth slightly ahead of increased guidance
* Overall Digital Business bookings growth of 19 percent in Q4; Full year growth at 21 percent
* A&N full year growth of 33 percent year-on-year, expected to revert to 2019 levels in 2021

Subscription shift momentum enabling Software AG to enter Helix acceleration phase
* Q4 Digital Business bookings share from subscription and SaaS accelerates to 84 percent; 81percent full year
* ARR growth of 10 percent year-on-year as at December 31st 2020
* Full year Recurring Revenue up 10.5 percent and now 84 percent of Total Product Revenue, already in line with 2023 ambition

Full year profit guidance met despite ongoing investment
* FY 2020 operating margin (EBITA Non-IFRS) at 21.2 percent and 26.3 percent for Q4 reflects successful balance of cost management and investment.

An analyst & media call will be held on Wednesday, 27 January 2021 at 09:30 CET.
For further details refer to the corresponding press release and the Software AG website.
Furthermore, Software AG will expand on its mid-term development and path to 2023 at its Capital Markets Day event on 23 February 2021.

Darmstadt, January 27, 2021

Software AG

The Management Board

Person making the notification:

Frederic Freichel
Senior Manager Investor Relations
E-Mail: frederic.freichel@softwareag.com
Tel: +49 6151 92 1106

Contact:

Otmar F. Winzig
Head of Investor Relations
otmar.winzig@softwareag.com
Tel.: +49-6151-92-1669

End of the ad hoc announcement

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Emitter:	Software AG Uhlandstraße 12 64297 Darmstadt Germany
Contact Person:	Investor Relations
Phone:	+49 615192-1900
E-Mail:	Investor.Relations@softwareag.com
Website:	www.softwareag.com
ISIN(s):	DE000A2GS401 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf, Hamburg, Hannover, Munich, Stuttgart, Tradegate