XBRL will turn regulatory burden into IR opportunity
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XBRL will turn regulatory burden into IR opportunity

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XBRL will turn regulatory burden into IR opportunity Presentation Transcript

  • 1. 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
  • 2. 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)
  • 3. 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
  • 4. 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-reports collection organizations such as regulators, banks, stock exchanges and others
  • 5. 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 Supervisors CO mmon solvency ratio REP orting 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
  • 6. 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
  • 7. 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
  • 8. 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
  • 9. 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.
    FTSE 100 HDAX 110 CAC 40 MIB 30 > 90% reduced visibility 9,360 Stock listed companies in Europe Bloomberg 500 MSCI Europe 565
  • 10. 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
  • 11. 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
  • 12. 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
  • 13.  
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  • 16. XBRL-Initiative of Deutsche Börse 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 Centralization of delivery and request of data Easy access to relevant capital market data Cost savings in preparation, production, distribution √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Issuers Investors Analysts Service Providers XBRL offers a series of advantages to everybody interested in capital market data Key arguments for the use of XBRL – and who benefits from it
  • 17. 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
  • 18. 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: otmar.winzig@softwareag.com