Xbrl will turn regulatory burden into ir opportunity
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XBRL will turn regulatory burden into IR opportunity. Otmar F. Winzig Vice President Investor Relations, Software AG Member of the Board of DIRK (German Investor Relations Association) Member of the CESR Consultative Working Group on Transparency. Software AG Profile.

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XBRL will turn regulatory burden into IR opportunity

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Xbrl will turn regulatory burden into ir opportunity

XBRL will turn regulatory burden into IR opportunity

Otmar F. WinzigVice President Investor Relations, Software AGMember of the Board of DIRK (German Investor Relations Association)Member of the CESR Consultative Working Group on Transparency


Software ag profile

Software AG Profile

  • Europe’s largest and most established systems software provider(since 1969)

  • Leader in XML technology (integration and database management)

  • Software AG provides a real-time single view of strategic business information by integrating applications and systems, in addition to modernizing mainframe and open system IT environments

  • Headquartered in Darmstadt, Germany; US headquarters in Reston, VA

  • 2,500 employees / active in 59 countries / support mission-critical IT systems of 3,000 customers

  • > 500 mn. $ revenue

  • Market Cap ~1 bn. $ / Free Float: 68.4% / Frankfurt stock exchange (TecDax)


Software ag and xbrl 1

Software AG and XBRL (1)

  • Fully committed to XBRL since 2001

  • XBRL competence center in Madrid

  • Founding member of XBRL jurisdictions in D, NL, E, F, I, B

  • First company in reporting in IFRS using XBRL

  • First European portal “XBRL in action” with Ernst & Young Germany: www.xbrlrating.de. Rating portal for companies

  • First European “XBRL based Stock Exchange Portal” with German Stock Exchange Live at http://xbrl.deutsche-boerse.com


Software ag and xbrl 2

Software AG and XBRL (2)

  • Digital Reporting Platform (DRP)Example live at http://xbrl.softwareag.es/drp

    • First XBRL based platform for Digital e-Reporting and e-Filing

    • Taxonomy management, validation and versioning

    • XBRL report management validation and analysis

    • Extensible XBRL framework for fast project implementation

    • Targets e-reportscollection organizations such as regulators, banks, stock exchanges and others


Software ag and xbrl 3

Software AG and XBRL (3)

  • Development of industry based Taxonomy for Credit Risk Assurance Companies by Software AG ICISA – FLIPA XBRL taxonomy for exchange of credit risk information

  • XBRL training at Software AG Institute Madrid

  • Development of taxonomies for Spanish companies e.g. Telefonica, Spanish Stock Exchange

  • Development leadership for COREP taxonomy for CEBS, Committee of European Banking SupervisorsCOmmon solvency ratio REPorting framework, for credit institutions and investment firms under the future European Union capital requirements regime

  • Digital Reporting Platform as central XBRL repository for COREP users http://www.softwareag.es/drp


Regulatory requirements european transparency directive 2004 2007 1

Regulatory Requirements European Transparency Directive 2004/2007 (1)

Frequency and Quality of Corporate Reporting

  • IAS / IFRS

  • Annual report / half-year reports

    • Audited financial statements (full / condensed)

    • Auditor’s report / review

    • Management report

    • Personal statements (European SOX!)

  • Interim Reports Q1 and Q3

    • Statement covering material events and transactions

    • General description of the financial position

      or quarterly financial reports


Regulatory requirements european transparency directive 2004 2007 2

Regulatory Requirements European Transparency Directive 2004/2007 (2)

Dissemination and storage of corporate information

  • Dissemination models in place in different European member states today range from newspaper advertisements, web posting, central electronic filing and simultaneous electronic distribution.

    • Push versus pull

    • Relevance of newspapers

  • Storage models favor

    • a kind of “European Edgar” or

    • Commercial sector (linked) database(s)

Simultaneous distribution and European wide access to information relevant to shareholders


What ir officers should ask for position of german ir association dirk

What IR officers should ask for(Position of German IR Association / DIRK)

  • One information gateway only to fulfill legal requirements

  • Dissemination and storage in one process

  • Common format and language

  • Comparable and viable data from sector / peer groups

  • Shareholder transparency

    or simply

    the (mandatory) use of XBRL


Xbrl based ir opportunities 1

XBRL based IR Opportunities (1)

Today > 90% of the 10,000 companies

listed on European stock exchange

are unknown to the global investor

community.

Even with outstanding results, their

success on the capital market

depends on singular sell-side

analysts’ banks or broker firms.

XBRL needs no human interface

(i.e. filter or barrier) to transform

financial data into relevant and

wide-spread information for

investors.

9,360

FTSE 100

MSCI Europe 565

HDAX 110

Bloomberg 500

CAC 40

MIB 30

> 90%reduced visibility

Stock listedcompanies in Europe


Xbrl based ir opportunities 2

XBRL based IR Opportunities (2)

Issuers / IROs

  • Less dependent on individual opinions of sell-side analysts and other opinion leaders

  • Less vulnerable in respect to interest-driven market participants

  • Easy benchmarking within peer group

  • Accelerate and expand distribution of corporate information

  • Increase visibility and awareness in the capital market


Xbrl based ir opportunities 3

XBRL based IR Opportunities (3)

Financial Analysts

  • Less manual spreadsheet data entry

  • Ability to search and compare non-numeric information

  • More time for in-depth analysis

  • More companies to cover

  • Faster reaction to new information

    Investors

  • Less dependent on analysts’ opinion and skills

  • Spot outperforming companies immediately (pop-up)

  • Receive analysis of financial data at the time of publishing

  • Less cost for relevant information

  • Better transparency within peer group


Xbrl initiative of deutsche b rse

XBRL-Initiative of Deutsche Börse

First Pilot Project (2004)

  • Issuer provides quarterly reports (IFRS) to Exchange Reporting (ERS) System / Excel format according to template based on common simple taxonomy

  • Deutsche Börse

    • Transform Excel into XBRL

    • Manage XBRL database

    • Offer analytic tools

      Second Pilot Project (2005)

  • Issuer provides annual report (IFRS) to ERS / Excel or XBRL format standard / taxonomy can be amended by individual notes


Xbrl initiative of deutsche b rse1

XBRL-Initiative of Deutsche Börse

Key arguments for the use of XBRL – and who benefits from it

Service Providers

Investors

Issuers

Analysts

XBRL offers a series of advantages to everybody interested in capital market data

Increase of quality and consistency of data

Higher profitability and efficient production process

Easy to compare published information

Easy handling due to standardization and automation

Faster availability of data

Easy access to relevant capital market data

Centralization of delivery and request of data

Cost savings in preparation, production, distribution


Food for thought future design of financial reporting

Food for thought:Future design of financial reporting

  • Use future oriented technology

    • Universal data format -- XBRL

    • Individual selection of information by stakeholders

  • Redesign corporate reporting

    • Tier One: Global GAAP

    • Tier Two: Sector reporting standards

    • Tier Three: Company specific information

  • Provide shareholder transparency

    • Immediate disclosure of shareholdings

    • Disclosure of lending and short selling


Contact details

Contact details

Otmar F. Winzig

Vice President Investor Relations

Software AG

Uhlandstraße 12

D-64297 Darmstadt, Germany

Tel.: +49 (0) 6151 / 92-1669

Fax: +49 (0) 6151 / 92-1383

eMail: [email protected]


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