ProcessWorld 2012 users’ conference: cloud, social, mobile and big data at the agenda

Fair Value EUR29 (-5%)       SELL

News published on October Tuesday 16, 2012
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ANALYSIS

  • An integrated BPE offer with cloud, social, mobile and big data capabilities. Yesterday Software AG announced at its ProcessWorld 2012 users’ conference in Orlando the launch of WebMethods 9.0 and ARIS 9.0 software. The new version of WebMethods introduces a neutral integration layer to any cloud-based application (CloudStream), as well as mobile integration (Mobile Suite), social collaboration (Pulse) and big data capabilities (using Terracotta’s in-memory technology). ARIS 9.0 includes ARIS Connect, which adds social networking capabilities to business process design.
  • These announcements are the follow-up of the strategy presented 18 months ago. We consider these are major evolutions for the BPE (Business Process Excellence) division (est. 52% of 2012 sales) as Cloud, Mobile and Social Computing and Big data create new issues to be addressed in Business Process Management - especially speed (due to the proliferation of corporate data), and online collaboration. In addition, we consider Software AG is catching up against its competitor TIBCO, which was more advanced in these areas. That said, if products are there, the sales force has to execute well in order to be translated into Software AG’s numbers in the future.
VALUATION
  • Software AG’s shares are trading at est. 8.2x 2012 and 7x 2013 EV/EBIT multiples.
  • Net debt on 30th June 2012 was EUR14.8m (net gearing: 1%).


NEXT CATALYSTS

Final Q3 12 results on 30th October before markets open, with a conference call at 10am CET.


Gregory Ramirez, gramirez@bryangarnier.com

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