Ad hoc Disclosure (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):
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
Digital Business Lines and A&N bookings growth slightly ahead of increased guidance
Subscription shift momentum enabling Software AG to enter Helix acceleration phase
Full year profit guidance met despite ongoing 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
The Management Board