LEADING THE
EVOLUTION
Investor & Analyst Strategy Day
28/09/2009
AGENDA
9.30am
Welcome and agenda
Tim Brill, IR Director
9.35am
Introduction
Kevin Loosemore, Chairman
Market opportunity
9.45am
Market overview
Stuart McGill, CTO
Business Models, M&A
10.30am
Revenue and growth metrics, Borland & Compuware
integration progress, M&A strategy post integrations
11.15am
Coffee
Nick Bray, CFO
Andy Greaves, Head of
Go To Market Integration
Go-To-Market Structures and Process
11.30am
Field operations - resources, channels, geographies,
customer examples
Jorge Dinares,
President, International Sales
11.50am
Partner case study
Eric Pinseel, EMEA Solution
Sales Director, Microsoft
12.10pm
Management Panel Q&As
12.30pm
Summary and close
Kevin Loosemore, Chairman
2
SAFE HARBOUR STATEMENT
The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated
(“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the
following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments
cannot be relied upon as a guide to the future performance of such investments.
This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire securities in Micro Focus International plc (the “Company”) or any company within the Micro Focus Group.
The release, publication or distribution or this presentation in certain jurisdictions may be restricted by law, and therefore persons in such
jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.
Certain statements contained in this presentation constitute forward-looking statements. All statements other than statements of historical facts
included in this presentation, including, without limitation, those regarding the Company‟s financial condition, business strategy, plans and
objectives, are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including
the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other variations or
comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the
actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions
regarding the Company‟s present and future business strategies and the environment in which the Company will operate in the future. Such risks,
uncertainties and other factors include, among others: the level of expenditure committed to development and deployment applications by
organisations; the level of deployment-related turnover expected by the Company; the degree to which organisations adopt web-enabled services;
the rate at which large organisations migrate applications from the mainframe environment; the continued use and necessity of the mainframe for
business critical applications; the degree of competition faced by the Company; growth in the information technology services market; general
economic and business conditions, particularly in the United States; changes in technology and competition; and the Company‟s ability to attract
and retain qualified personnel. These forward-looking statements speak only as at the date of this presentation. Except as required by the Financial
Services Authority, or by law, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise.
3
LEADING THE
EVOLUTION
Kevin Loosemore, Chairman
Introduction
INTRODUCTION
 Micro Focus is now positioned with:
 A fantastic market opportunity…
 ….with potentially compelling financials…
 …..that can be delivered by quality execution.
5
LEADING THE
EVOLUTION
Investor & Analyst Strategy Day
28/09/2009
LEADING THE
EVOLUTION
Stuart McGill, CTO
Market overview, and market opportunities
THE ENTERPRISE APPLICATION LANDSCAPE
UNIX/Linux
C++/Java
Linux
Java
z/OS
PL/1
CICS
IMS
COBOL
COBOL
Windows
C#
Web
Ajax, Flash
8
THE MICRO FOCUS OPPORTUNITY
 Unique focus on the value of Enterprise Applications
 Delivering „customer‟ choice
 Enabling modernisation
 Industry partnerships
9
AN INTRODUCTION TO MARKET SEGMENTS – THE SOFTWARE DEVELOPMENT LIFECYCLE
Req’t
Analyse
Develop
Test
Deploy
Track
 The Software Development Lifecycle is a process used by all software developers to
build applications
 It consists of a series of sequential steps that software developers and development
managers understand
 Software tools have evolved to apply to each stage of the process, and as a result,
created a series of separate software tools markets
 Micro Focus group these distinct markets under the term Application Management
10
MICRO FOCUS STRATEGY

The long term strategy consists of three overlapping phases:
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
3
Future Potential
11
COBOL – growing the
„core‟ market
THE COBOL MARKET – HISTORIC GROWTH DRIVERS
1959-1976
1976-2006
Other
Other
Migrations
from Vendor
to Open
Micro Focus
COBOL
Market
Proprietary COBOL
Markets
Open COBOL
Expansion
Migrations from proprietary platforms creates step changes in market opportunity
13
THE COBOL MARKET – CURRENT GROWTH DRIVERS
2006-2009
Other
Migrations
from Vendor
to Open
Open COBOL
Expansion
Micro Focus
COBOL
Market
Migrations from other platforms show first signs of promise
14
MICRO FOCUS COBOL MARKETS IN 2006
Segment
Micro
Focus
Market
Analyse
Develop
Micro Focus Available
Market
WW COBOL Tools
Analyse
COBOL
Open
COBOL
Product /
Jargon
Application
Assessment and
Understanding
Development and
deployment tools
for COBOL
Mkt size1
$65m
$555m
20%
6-8%
4%
2-4%
 Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
 Stable, profitable
COBOL opportunity
with modest market
growth expected
$620m
(2008 figures)
Hist (06-08)
Comments
Fcst (08-11)
Source: 1Gartner, IDC, Forrester, Competitor revenues
 „Stepping stone‟ to
upsell other
segments
 Utilised extensively
as part of services
engagements
 Acu and RM (Liant)
brands added to
extend ISV base
 Micro Focus
expected to
outperform market
growth expectations
15
MICRO FOCUS COBOL MARKETS TODAY
Segment
Micro
Focus
Market
Analyse
Micro Focus
Available Market
Develop
WW COBOL Tools
Analyse
Mainframe
COBOL
Open
COBOL
Product /
Jargon
Application
Assessment and
Understanding
Development and
deployment tools
for COBOL
Development and
deployment tools
for Mainframe
COBOL
Mainframe
application
migration
Mkt size1
$65m
$740m
$1,300m
>30% of
mainframe
20%
6-8%
4%
2-4%
-2%
-2-4%
>10%
>10%
 Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
 Stable, profitable
COBOL opportunity
with modest market
growth expected
COBOL
(2008 figures)
Hist (06-08)
Comments
Fcst (08-11)
Source: 1Gartner, IDC, Forrester, Competitor revenues
 „Stepping stone‟ to
upsell other
segments
 Utilised extensively
as part of services
engagements
 Acu and RM (Liant)
brands added to
extend ISV base
 Micro Focus
expected to
outperform market
growth expectations
 Mature market
dominated by IBM
 Other major players
(CA, Compuware)
deriving significant
maintenance
revenues
 Little innovation is
creating market
potential for
customers that will
always be on the
mainframe
Migrations
$2,105m
 Rapidly expanding
market having
„crossed the chasm‟
 SME mainframe
customers moving
off the platform,
large customers
considering
workloads
 Microsoft partnership
has been critical to
building credibility
and mindshare
16
MICRO FOCUS COBOL MARKETS TODAY ($2,405M)
Segment
Micro
Focus
Market
Analyse
Enterprise
Integration
Develop
WW COBOL Tools
Analyse
Mainframe
COBOL
Open
COBOL
Product /
Jargon
Application
Assessment and
Understanding
Development and
deployment tools
for COBOL
Development and
deployment tools
for Mainframe
COBOL
Mainframe
application
migration
Mainframe
application
integration tools
Mkt size1
$65m
$740m
$1,300m
>30% of
mainframe
$300m
20%
6-8%
4%
2-4%
-2%
-2-4%
>10%
>10%
2%
0-2%
 Analysis and APM
capability raised the
profile of Micro
Focus in the CIO
community
 Stable, profitable
COBOL opportunity
with modest market
growth expected
COBOL
(2008 figures)
Hist (06-08)
Comments
Fcst (08-11)
Source: 1Gartner, IDC, Forrester, Competitor revenues
 „Stepping stone‟ to
upsell other
segments
 Utilised extensively
as part of services
engagements
 Acu and RM (Liant)
brands added to
extend ISV base
 Micro Focus
expected to
outperform market
growth expectations
 Mature market
dominated by IBM
 Other major players
(CA, Compuware)
deriving significant
maintenance
revenues
 Little innovation is
creating market
potential for
customers that will
always be on the
mainframe
Migrations
 Rapidly expanding
market having
„crossed the chasm‟
 SME mainframe
customers moving
off the platform,
large customers
considering
workloads
 Microsoft partnership
has been critical to
building credibility
and mindshare
 Capabilities added
through the
NetManage
acquisition
 „Stepping stone‟ to
cross-sell other
segments
 Used as part of
mainframe
migrations
17
MICRO FOCUS COBOL MARKET OPPORTUNITY
Segment
Micro
Focus
Market
Analyse
Develop
WW COBOL Tools
Migrations
Enterprise
Integration
Development and
deployment tools
for Mainframe
COBOL
Mainframe
application
migration
Mainframe
application
integration tools
$740m
$1,300m
>30% of
mainframe
$300m
Fcst (08-11)
20%
6-8%
4%
2-4%
-2%
-2-4%
>10%
>10%
2%
0-2%
Micro Focus


 


Mkt Share
2nd
1st
2nd
1st
3rd
Opportunity


 
  

 
   
 
  

Analyse
COBOL
Open
COBOL
Product /
Jargon
Application
Assessment and
Understanding
Development and
deployment tools
for COBOL
Mkt size1
$65m
Mainframe
COBOL
(2008 figures)
Footprint
Hist (06-08)
LT Opport
Brand
Source: 1Gartner, IDC, Forrester, Competitor revenues
Relativity
Express
Mf Express
Ent Server
Rumba
18
COCOL MARKETS SUMMARY
 Micro Focus has an available COBOL tools market of $2,405m
 The company has the potential to exceed market growth in its „open‟ COBOL business
 The Migrations business is growing at >10% and shows promise
 The COBOL market continues to be a growth engine for the business
19
EXPANDING
INTO APPLICATION MANAGEMENT TOOLS
MICRO FOCUS STRATEGY

The long term strategy consists of three overlapping phases:
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
3
Future Potential
21
APPLICATION MANAGEMENT MARKETS INTRODUCTION
 Micro Focus has acquired positions in a number of separate software tools
markets grouped under the term ‘Application Management’
 The addition of Borland, and Compuware’s Testing and ASQ division, creates a
platform for future growth
 The acquired products are synergistic with our ‘core’ COBOL market and offer
immediate potential
 COBOL software development groups represent only 20% of the overall market,
and opportunity
 Testing is the strategic focus for our execution plans
22
MICRO FOCUS SOFTWARE DEVELOPMENT LIFECYCLE IN 2006
Track
Requirements
Analysis
Code/
Compile
Developer
Test
Build
QA
Verification
and Testing
Deploy
Quality
Assurance
and Testing
Deploy
Integrated Development Environment (IDE)
Requirements
Analysis
Code/
Compile
Developer
Test
Build
Integrated Development Environment (IDE)
Enterprise Application Development in COBOL and PL/I
Micro Focus Market Positions
23
MICRO FOCUS SOFTWARE DEVELOPMENT LIFECYCLE TODAY
Track
Requirements
Analysis
Code/
Compile
Developer
Test
Build
QA
Verification
and Testing
Deploy
Integrated Development Environment (IDE)
Track
Requirements
Analysis
Code/
Compile
Developer
Test
Build
Quality
Assurance
and Testing
Deploy
Integrated Development Environment (IDE)
Enterprise Application Development in COBOL and PL/I
Micro Focus Market Positions
24
THE ROLE OF ACQUISITIONS
Enterprise
Application
Development
COBOL
development
(Windows/UNIX)
COBOL
Migrations
PL/I Migrations
Mainframe
Development
Modernization
25
THE BROADER MARKET FOR TOOLS
Enterprise
Application
Development
Enterprise Java
Development
Enterprise C
Development
Web Application
Development
Microsoft
Application
Development
26
MICRO FOCUS APPLICATION MANAGEMENT MARKETS ($6,400M)
Step
Requirem’ts
Product /
Jargon
Requirements mgmt
/ Definition
Application
Assessment and
Understanding
Development tools,
Integrated Design
Environments (IDE)
Performance &
Load testing,
Functional testing,
Test mgmt
Software Config &
Change Mgmt
(SCCM)
Mkt size1
$200m
$100m
$3,000m
$2,000m
$1,100m
10%
6-8%
20%
6-8%
4%
2-4%
13%
8-10%
10%
2-4%
 Relatively small
though high growth
market
 Micro Focus has
expanded its market
capability with the
acquisition of
Relativity
 Stable, profitable
COBOL opportunity
with modest market
growth expected
Analyse
Develop
Test
Deploy
Track
Hist (06-08)
Fcst (08-11)
Comments
1
Growth
(2008 figures)
 Micro Focus is a #2
player with Caliber
brand from Borland
 Low customer base
penetration
 Serious focus from
IT organisations to
manage demand
and delivery
 Can often lead to
follow-on sales
across other
products
Source: 1Gartner, IDC, Forrester, Competitor revenues
 Potential high
growth market –
diverse approaches
preventing
expansion
 Micro Focus
expected to drive
market growth
expectations
 Large, high growth
market
 Micro Focus has
strong market
positions and
complementary
offerings
 Slow burn
investment
 Other languages
dominated by either
Microsoft or Open
Source
 Customer base
from Borland and
Compuware
significant platform
for future growth
 „Stepping stone‟ to
upsell other
segments
 Rapid growth in
volume expected (if
not revenues)
 Market linked
closely to
requirements
 Mature / saturated
and competitive
market – not core
focus but should
provide valuable
maintenance
streams
 Open source
solutions creating
disruption in market
27
MICRO FOCUS APPLICATION MANAGEMENT OPPORTUNITY
Step
Requirem’ts
Product /
Jargon
Requirements mgmt
/ Definition
Application
Assessment and
Understanding
Development tools,
Integrated Design
Environments (IDE)
Performance &
Load testing,
Functional testing,
Test mgmt
Software Config &
Change Mgmt
(SCCM)
Mkt size1
$200m
$100m
$3,000m
$2,000m
$1,100m
Fcst (08-11)
10%
6-8%
20%
6-8%
4%
2-4%
13%
8-10%
10%
2-4%
Micro Focus
 




2nd
2nd
1st
3rd
5th
Opportunity
 

 
  

Longer Term

 
   
  

Brand
Caliber
Relativity
COBOL
Silk
Analyse
Develop
Test
Deploy
Track
Footprint
1
Growth
(2008 figures)
Hist (06-08)
Mkt Share
 Strategic position
alongside testing
Comments
 Slow burn
investment with
unique capability
alongside other
segments
 Cloud platform
upgrades offer
more rapid growth
in future
 Large, high growth
market with strong
offerings
StarTeam
 Assess options for
future growth and
consolidation
Source: 1Gartner, IDC, Forrester, Competitor revenues
** Micro Focus has the potential to exceed market growth rate due to the double digit growth migrations opportunity within this market
NB - Development market segment includes both development and deployment revenues for Cobol - Deployment market segment is deployment of all languages excluding Cobol
28
MICRO FOCUS CUSTOMER SEGMENTS - DEVELOPER PLATFORMS
Requirements
Analyse
Develop
Test
Deploy
Track
Mainframe
Open
Windows
Web
Cloud
 Micro Focus value proposition focused on customers with major
focus on both Open and Windows platforms in a heterogeneous
market (85% of customers)
 Mainframe expertise in modernising applications base creates
further unique capability in the market
 Micro Focus‟ ISV applications offer significant and immediate
cross-selling potential across segments and platforms
 Understanding of developer platforms required to target revenue
bearing, profitable market segments
 Strategic alliances critical e.g. Microsoft, to add value
 Web platforms will be extended through organic growth where
possible – requirements are small footprint, agile products
accessed via the web
 Cloud architectures are fundamental across all segments over the
next 5 years
 Mainframe platform of interest to extend Micro Focus‟ reach
across all major enterprise platforms generating significant
revenue
 Sufficient scale required to address mainframe segment would
imply future acquisition potential
29
APPLICATION MANAGEMENT MARKETS SUMMARY
 Micro Focus has an available market opportunity of $6,400 million
 Application Management is a series of linked software tools based market
segments which include our core COBOL market of $2,405 million
 The available market in ‘develop’ment expands to $3,000 million to include
coverage for other languages
 Testing is the strategic market for growth and the focus of management
 Testing is expected to grow at >10% after full integration is achieved
 This is a significant platform for the future growth of the business
30
FUTURE
POTENTIAL
MICRO FOCUS STRATEGY

The long term strategy consists of three overlapping phases:
1
COBOL – Increasing the ‘Core’ Growth Market
2
Expanding into Application Management Tools
3
Future Potential
32
MICRO FOCUS APPLICATION MANAGEMENT MARKETS
Step
Requirement
s
Product /
Jargon
Requirements mgmt
/ Definition
Application
Assessment and
Understanding
Development tools,
Integrated Design
Environments (IDE)
Mkt size1
$200m
$100m
10%
6-8%
 Relatively small
though high growth
market
Analyse
Develop
Test
Deploy
Track
Performance &
Load testing,
Functional testing,
Test mgmt
Application servers,
run-time,
deployment
Software Config &
Change Mgmt
(SCCM)
$3,000m
$2,000m
>$10,000m
$1,100m
20%
6-8%
4%
2-4%
13%
8-10%
c. 6%
2-4%
10%
2-4%
 Micro Focus has
expanded its market
capability with the
acquisition of
Relativity
 Stable, profitable
COBOL opportunity
with modest market
growth expected
Hist (06-08)
Fcst (08-11)
Comments
1
Growth
(2008 figures)
 Micro Focus is a #2
player with Caliber
brand from Borland
 Low customer base
penetration
 Serious focus from
IT organisations to
manage demand
and delivery
 Can often lead to
follow-on sales
across other
products
Source: 1Gartner, IDC, Forrester, Competitor revenues
 Potential high
growth market –
diverse approaches
preventing
expansion
 Micro Focus
expected to drive
market growth
expectations
 Large, high growth
market
 Micro Focus has
strong market
positions and
complementary
offerings
 Slow burn
investment
 Other languages
dominated by either
Microsoft or Open
Source
 Customer base
from Borland and
Compuware
significant platform
for future growth
 „Stepping stone‟ to
upsell other
segments
Rapid growth in
volume expected (if
not revenues)
 Market linked
closely to
requirements
 Deployment is a
large market and
spans multiple
software segments
– it is a “musthave”, but not an
independent
strategic focus
 Micro Focus has
deployment
associated with
their own products
 Mature / saturated
and competitive
market – not core
focus but should
provide valuable
maintenance
streams
 Open source
solutions creating
disruption in market
 Potential to expand
into other segments
33
MICRO FOCUS APPLICATION MANAGEMENT MARKETS
Step
Requirement
s
Product /
Jargon
Requirements mgmt
/ Definition
Application
Assessment and
Understanding
Development tools,
Integrated Design
Environments (IDE)
Performance &
Load testing,
Functional testing,
Test mgmt
Application servers,
run-time,
deployment
Software Config &
Change Mgmt
(SCCM)
Mkt size1
$200m
$100m
$3,000m
$2,000m
>$10,000m
$1,100m
Fcst (08-11)
10%
6-8%
20%
6-8%
4%
2-4%
13%
8-10%
c. 6%
2-4%
10%
2-4%
Micro Focus
 





2nd
2nd
1st
3rd
Niche
5th
Opportunity
 

 
  
 

Longer Term

 
   
  
  

Analyse
Develop
Test
Deploy
Track
Footprint
1
Growth
(2008 figures)
Hist (06-08)
Mkt Share
Brand
Caliber
 Strategic position
alongside testing
Source: 1Gartner, IDC, Forrester, Competitor revenues
Relativity
 Slow burn investment with unique
capability alongside
other segments
COBOL
 Cloud platform
upgrades offer
more rapid growth
in future
Silk
 Large, high growth
market with strong
offerings
Visibroker
 Potential to expand
into other segments
working with
strategic partners
StarTeam
 Assess options for
future growth and
consolidation
34
POTENTIAL NEW DEPLOYMENT OPPORTUNITY
Enterprise
Application
Development
Enterprise Java
Development
Enterprise C
Development
Web Application
Development
Microsoft
Application
Development
Potential New Deployment Opportunities with
Visibroker
35
MICRO FOCUS COBOL MARKET FUTURES – ENTERPRISE CLOUD SERVICES
Other Cloud-based
applications
Web 2.0/3.0
UI/Applications
[Auction]
CLOUD
Micro Focus
Enterprise Cloud
Services
Development
Services
Private / Public
Database / storage
Management
Application
Hosting
36
FUTURE MARKETS SUMMARY
 Micro Focus have a number of niche positions in other market segments that are
of interest and that could be significant in the longer term
 ‘Cloud’ architectures will be a significant part of all of the company’s activities in
the medium term and across all primary market segments
– COBOL
– Testing
– Application Management
37
SUMMARY
SUMMARY
 Micro Focus has significantly increased its available market
– From $620m in 2006 to $6,400m in 2009
 The COBOL market continues to be a growth engine for the business
– Migrations are fuelling the underlying growth of COBOL revenues
 Micro Focus has moved into a number of software tools markets grouped under
Application Management
 Testing is the focus for growth alongside migrations
 A number of niche positions offer great potential in the future
 ‘Cloud’ architectures will become significant in the medium term across all of the
company's offerings
39
LEADING THE
EVOLUTION
Nick Bray, CFO,
Business models to address market opportunities,
M&A strategy, Borland & Compuware integrations,
and debt position
LAYING THE FOUNDATIONS
 Significant market opportunity
 Three years of strong organic growth
 Seven acquisitions – five in last 12 months
 Borland/Compuware integration – first phase nearing completion
 Next priority to optimise total Group operating model
– go-to-market alignment across enlarged solution set
– maximise sales effectiveness across type, channel, product and geography
– drive further G&A efficiency opportunities, further improve systems and processes
 Invest appropriately for future growth
 Medium to long term further acquisition potential
41
POTENTIALLY COMPELLING FINANCIALS
 The foundations give us the opportunity to expand Earnings Per Share:
 Integration „dividend‟
 Organic „dividend‟
 Cash generation „dividend‟
 Balance sheet „dividend‟
42
REVENUE PROFILE
Group revenue breakdown
Licence revenue breakdown
Licence
Maintenance
Consultancy
OEM
Higher volume/Low value
Large transactions
4.2%
FY2009
18%
25%
48.2%
47.6%
FY2008
57%
4.7%
12%
45.7%
30%
49.6%
58%
43
REVENUE PROFILE FY2009 – „CORE‟ PRODUCTS
FY2009
FY2006
5%
7%
20%
27%
68%
73%
APM
APM
Modernization/migration
Modernization/migration
Core COBOL development
Core COBOL development
 Migration revenues have grown at approximately 50% per year the last two years (from low base)
 Solid organic growth in core COBOL, aided by acquisitions of Acucorp and Liant
44
REVENUE PROFILE FY2009 – TESTING/ASQ PRODUCTS
Revenue by Type
Revenue by Product
23%
28%
54%
65%
7%
23%
Licence
Test
Maintenance
Other
Consulting
Visibroker
45
MICRO FOCUS COMBINED GROUP REVENUE PROFILE
Revenue by Type
Revenue by Product
5%
19%
41%
54%
3%
18%
8%
8%
44%
Licence
Testing
APM
Maintenance
Other
DEV
Consulting
Visi
MOD/MIG
46
GROWTH STRATEGY
 Strengthening the foundations
 Continued focus on organic growth
 Continued growth through acquisitions
47
ACQUISITION AS AN END-TO-END PROCESS
Pre-DD
Due Diligence
Integration
Organic
Growth
Early financial
views
Success criteria
Integration planning
• Onsite
• Fast
• Execution of
decisions
made
Risk
assessment
48
BORLAND & COMPUWARE INTEGRATIONS PROGRESS





32 work streams have delivered 229 out of 294 deliverables
Programme is being managed by a team of 20 staff
Activities are tracking to plan
Costs are tracking within budget
Compuware integration complete
SYNERGIES
PEOPLE
COST CONTROL
 Majority of G&A now within
 Took out more than 150 heads in the
 All non-integration projects
Micro Focus
 External spend on tax, audit,
legal and listing / compliance
Cut almost to NIL
 Consolidation underway of
facilities in France, Germany,
Australia, Japan, Brazil,
Germany Singapore & UK
 Combined teams except
independent Borland R&D facility
US and Singapore day 1
 Will have taken out more than 300
heads, by 15/11
stopped
 Review of all spend on
subcontracting, external advice,
etc. completed with contracts
terminated where appropriate
 Go forward budgets modified to
fit Micro Focus norms. (Spend
as percentage of revenue etc.)
49
ACQUISITION STRATEGY
Non-organic growth current markets
Related markets
Organic growth current markets
Extended markets
50
POTENTIAL SOFTWARE DEVELOPMENT LIFECYCLE TARGETS
Analyse
Develop
Test
Deploy
Track
(ASQ division)
Bolt-on
Scale
Acquired
Requirem‟ts
51
STRENGTHENING THE FOUNDATIONS
 Global 2000 sales execution and sales productivity
 Multi product/multi channel GTM
 Inside sales coverage
 Direct coverage of new territories
 Consulting and systems integration
 Product requirements process
 Development alignment and efficiency
 Location and G&A efficiencies
52
CASH HIGHLIGHTS
 Cash generated from continuing operation in FY2009 $105.0m (2008: $91.0m)
 Cash balance at 30 April 2009 of $71.6m (2008: $92.4m), after NetManage, Liant and
Relativity acquisitions
 $215m debt facility, $100m net debt
Cash generation
at 31st August 2009
$105.0m
$91.0m
$58.2m
2007
2008
2009
53
POTENTIALLY COMPELLING FINANCIALS
 The foundations give us the opportunity to expand Earnings Per Share:
 Integration „dividend‟
 Organic „dividend‟
 Cash generation „dividend‟
 Balance sheet „dividend‟
54
LEADING THE
EVOLUTION
Jorge Dinares, President International Sales
Micro Focus „go to market‟ models & how we execute –
resources, channels, customers
APPLICATION MANAGEMENT & MODERNIZATION
EMEA, Latin America and India – Go-To-Market Focus
 Management team with blend of new talent and Micro Focus heritage
 Established markets penetrated with broader solutions offers and growing numbers of
large customer transactions
 New geographies addressed through direct investment and effective indirect channels
 High sales conversion rates, robust pipeline
 Compelling customer propositions for both sides of economic cycle
– Cost reduction, rapid ROI, productivity improvements
56
PROFESSIONAL AND RIGOROUS SALES MANAGEMENT
 Salesforce.com system adopted
 Daily focus on pipeline – detailed weekly management reviews
 Sales methodology and training a key focus
 Professional approach to pipeline development, management and deal closure
57
APPLICATION MANAGEMENT AND MODERNIZATION
Customer Focus
58
LEADING THE
EVOLUTION
Microsoft, Eric Pinseel,
EMEA Solution Sales Director
Partner case study
LEADING THE
EVOLUTION
Management Q&As
LEADING THE
EVOLUTION
Kevin Loosemore, Chairman
Summary and close
SUMMARY
 Micro Focus is now positioned with:
 A fantastic market opportunity…
 …with potentially compelling financials…
 …..that can be delivered by quality execution.
62
LEADING THE
EVOLUTION
Investor & Analyst Strategy Day
28/09/2009