El OIDO MUSICAL Y LA ACCION PSICOLOGICA DE LOS SONIDOS

de-rating (↓), re-rating

(↑), no change (→)

Average 1Y fwd P/E

multiple (11/2009-08/2011) Current 1Y fwd P/E multiple Reason

Allgeier → 5.5 3.9 No change: Closing of margin gap to competitors is already reflected in valuation.

Atos → 11.6 8.4 No change: Low valuation (compared to sector and history) already reflects project and integration risks of SIS, which is likely to surface in FY12 and FY13, in our view. In addition, re-rating unlikely as Atos has one of the lowest growth profiles among its peers.

Capgemini → / ↑ 14.9 9.7 Short term: No change as increasing focus on growth markets and current offshoring level supports margin expansion, which is already priced-in. Mid term: re-rating possible if margin level reaches >10% due to significantly higher offshoring and global leveraging of IP (Prosodie, etc.).

COR&FJA AG → 13.7 9.7 No change: Relatively slow organic growth, successful integration of acquisitions remains in focus.

Dassault Systèmes ↓ 20.0 17.2 EPS disappointment:

Not enough EPS upside to justify current multiple.

Indra Sistemas ↓ 11.5 9.6 Expected to de-rate: We expect EPS to decline in FY12 due to the high exposure to Spain and risk of a slower-than-expected turnaround of latest Brazilian acquisition.

Logica → 9.8 5.9 No change: Potential margin upside is mainly driven by a recovery of the public sector, in particular in the Benelux and UK. In this scenario, a return to Logica's historic valuation level is likely, but no significant re-rating.

REALTECH ↑ 11.5 6.5 Strategic shift: OEM agreement and partnership with SAP will result in a shift of the business.

Sage → 13.1 11.3 No change: M&A activity drives EPS upside.

SAP ↑ 15.8 12.0 Growth acceleration: HANA, BBD and mobile solutions. Software AG → 14.5 10.8 No change: M&A activity drives EPS upside.

Temenos → 17.4 9.3 No change: Stabilization of the situation in EMEA is likely to result in multiple recovery due to return to double-digit license growth. *1Y fwd P/E on a monthly base as of August 2011 Source: Thomson Datastream, UniCredit Research

Stocks with the possibility

of a de-rating We identify two stocks in our universe where we see a risk that the stocks could face a

multiple contraction below the average of the 11/2009-08/2011 time frame:

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compared to the other European software stocks. While Parametric Technologies has already faced a de-rating from 18x to 14x currently, Autodesk and Dassault Systèmes are both trading at substantial premiums to the other software stocks in our universe although – at least for Dassault Systèmes – expected earnings growth has converged with the other software players. Although we continue to see cyclical tailwind for Dassault Systèmes, we doubt that possible earnings upside will be enough to justify the current multiple. We believe that Dassault Systèmes should trade broadly in line with the sector average.

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(versus growth expected by consensus) due to its more than 50% exposure to Spain, even after the consolidation of newly acquired Politec and the turn-around of Politec's business. We expect Indra Sistemas' normalized P/E multiple to decline to a level of 10x, in line with the sector average. In addition, we believe that the relatively high valuation of Indra currently does not adequately reflect the capitalization of some of its R&D expenses, which leads to higher margins than without capitalization. Capitalization of R&D expenses is rather uncommon among IT service companies.

"No change stocks" _{We identify seven stocks in our universe where we do not expect that the stocks have the}

potential to expand their multiple beyond the average of the 11/2009-08/2011 time frame:

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low organic growth profile. Hence a twist of the equity story is mainly derived from future M&A activity given the solid track record of both companies to make earnings accretive acquisitions. Given the relatively high maturity at least of parts of the core businesses of both companies (regionally and/or product-wise), a sustainable multiple expansion beyond the averages or the upper end of the multiple range are unlikely, in our view.

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January 2011. However, 4Q10 results as well as guidance for 2011 (released in February) below consensus estimates were the starting point for a substantial multiple contraction. A 1Q11 and 2Q11 license miss led to further earnings downward revisions and a guidance reduction. At the beginning of August, Temenos was trading at a 1Y fwd P/E multiple of around 12x. Despite the negative newsflow (in our view, mainly due to the current EMU crisis and the turmoil in parts of the MEA region), we do not believe Temenos has a structural problem, but rather a temporarily burden caused by lengthened sales cycles. If a normalization of the demand environment occurs, the company should be able to deliver double-digit license growth again and hence, multiples should recover from the current level towards the average since the start of the recovery.

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peers. However, an increase in profitability is already priced in to Allgeier Holding's valuation and would not lead to a re-rating in our view.

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which is unlikely to change in our view, as Atos is expected to continue to grow slower organically than its peers. In addition, we believe that the project and integration risks of SIS, which could surface during FY12 and FY13, are adequately reflected in Atos' valuation and will not lead to a significant de-rating.

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and other financial services verticals, which has seen relatively slow organic growth compared to the financial services vertical. After the merger of COR and FJA and some minor acquisitions, we expect the company to remain focused on the integration and no major shift in strategy or acceleration in growth that could result in a re-rating.

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Benelux and the UK. In this scenario, a return to Logica's historic valuation level is likely, but no significant re-rating. We see no strategic shift or significant earnings growth acceleration that could drive a re-rating.

Stocks with the possibility

of a re-rating We identify three stocks in our universe where we see the chance that the stocks could enjoy

a multiple expansion beyond the average of the 11/2009-08/2011 time frame:

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expansion resulting from the focus on growth markets and cost arbitrage (offshoring) is already priced-in, we do believe that a medium-term rerating is possible if Capgemini's operating margin level exceeds 10% due to a significant increase in offshoring, improvement in pricing and global leveraging of intellectual property (for instance Smart Energy and IP acquired through Prosodie).

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contributed 80% to total sales, while the software segment's share of revenues was only 20%. Given the revenue mix, the valuation of the company was always geared to IT service companies that used to trade in Western Europe broadly in the range of 10x-15x 1Y fwd P/E multiples (adjusted for the outliers of the recessions). Although the company's recent newsflow has been rather muted (disposal of the Italian and Spanish subsidiary and the departure of the CEO), we believe that the stock market is overlooking the positive strategic shift initiated in 2010: 1. the company announced an OEM agreement with SAP to integrate REALTECH's infrastructure software into SAP's solutions portfolio in July 2010.

2. REALTECH was able to win a large software contract from SAP for the operating of

Business ByDesign in December 2010. We believe that the operating development of REALTECH will see a positive impact mainly from 2012 onwards, which should result in a substantially higher revenue share of the software segment and hence a re-rating of the stock as a product rather than a consulting company.

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currently has three arrows in its quiver (Business ByDesign, HANA and the mobile solutions) that offer potential for a re-rating of the stock, in our view. Since August 2008, the company's 1Y fwd P/E multiple range was 13x-18x and we believe that a successful market adoption of the new products could result in the stock trading towards the high-end of the cited range.

A brief case study

for SAP's re-rating case As we have already discussed previously, HANA is for us SAP's most promising product, with

a possible positive short-term impact on license growth rates. According to Gartner Group, SAP generated around USD 2.4bn SSRS revenues in BI in 2010 (see also page 89). We applied the same revenue mix as for the group (license share of 33%) to derive the BI license revenue share of the USD 2.4bn SSRS revenues. This implies, based on our estimates, license revenues of USD 798mn or EUR 602mn in the BI segment in 2010. According to Gartner Group, the penetration with BI solutions was 28% in 2010 (was no more than 20% in 2007) and Gartner estimates that new applications (incl. in-memory analytics) will lead to a stronger penetration with BI applications. Our base case scenario for SAP assumes that the new BI applications will lead to a penetration of the existing customer base of around 70%. It does not assume any market share gains, which are possible, in our view, given SAP being an early mover in the market and its technology lead. We have applied a 21% maintenance fee on licenses and a 7% growth rate on core BI license revenues, with the remainder being accounted for by HANA and other products based on HANA/in-memory technology.