Software AG

EANS-Adhoc: Software AG - The Integration and Process Software Business (BPE) Continues to Grow in Q3 2011


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  ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
  adhoc with the aim of a Europe-wide distribution. The issuer is solely
  responsible for the content of this announcement.
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quarterly report

18.10.2011

• BPE license sales grew by 33 percent in Q3, 2011 
  (37 percent at constant currency)
• BPE product sales were up by 17 percent (21 percent at constant currency)
• Earnings turnaround in the IDS Scheer Consulting division
• Full-year forecast: Product revenue and earnings growth confirmed

Darmstadt, October 18, 2011 - After an initial consolidation of the financial
results for the third quarter 2011, Software AG (Frankfurt TecDAX: SOW)
accounted for license growth in Business Process Excellence (BPE) of 37 percent
(at constant currency) to EUR42 million (previous year EUR 31.4 million). Growth
in the product business (license and maintenance) was 21 percent, at constant
currency rates, amounting to EUR84 million (previous year EUR72.1 million). The
largest increases in sales were reported in North America, Germany, Australia
and South Africa.

Sales of software licenses across all business areas improved by 7 percent to
EUR75 million (previous year EUR69.6 million) or 11 percent at constant
currency. The strong growth in BPE license revenue more than offsets the
expected decline to EUR32 million (previous year EUR36.6 million) in Enterprise
Transaction Systems (ETS) sales. With total maintenance revenues stable, Group
product revenue (licenses and maintenance) increased to EUR169 million (previous
year EUR166.2 million), an increase of 5 percent at constant currency. 

Software AG generated services revenues of EUR105 million (previous year
EUR108.3 million) in the third quarter. Of this total, EUR63 million (previous
year EUR60.5 million) were generated in the BPE and ETS services area and EUR43
million (previous year EUR47.8 million) by IDS Scheer Consulting (IDS). Software
AG´s new services management team is focused on increasing profitability
accepting slower revenue growth during this transition phase.

Total Group turnover was EUR275 million (previous year EUR275.3 million), an
increase of around 2 percent at constant currency rates. The continuing strength
of the Euro in the third quarter resulted in lower stated revenues of approx.
EUR7 million as foreign currency sales are converted into Euro. Through a
stronger focus on profitability in the services business, IDS Scheer Consulting
successfully managed a turnaround in earnings in the third quarter and will
significantly increase its contribution to results in the second half of the
year. 

Overall in the third quarter, the Software AG group achieved an operating profit
(EBIT) of approx. EUR71 to EUR73 million (previous year EUR69.1 million).

Software AG considers itself to be well on the way to achieving its full year
growth targets in its core business, the sale of software licenses and
maintenance. The ETS product revenue for the first nine months is 1 percent
under the 2010 year level. This performance confirms the forecast for the full
year 2011 of ETS product revenue within plus or minus 2 percent of the 2010
level. After nine months the BPE business division has delivered 10 percent
revenue growth at constant currency rates. There is strong customer interest in
integration and process software and this will continue to generate double digit
growth, despite the macro-economic uncertainties. Therefore, the company
confirms its product revenue growth target for 2011 of 10 to 15 percent at
constant currency. 

In the IDS Scheer Consulting business division the company will remain focused
on profitable projects. For the full fiscal year, this will have two
consequences: first an expected increase in the EBIT margin of around 200 basis
points to approx. 26 percent (previous year 24.0%); and second a total Group
revenue growth of between 2 to 5 percent at constant currency. The profit after
tax will therefore be 10 to 15 percent over the EUR175.6 million reported in
2010. 

The detailed financial results will be published by Software AG on October 27,
2011.


Further inquiry note:
Robert Adolph
Manager Investor Relations
Tel.: +49 (6151) 92 1237
E-Mail: robert.adolph@softwareag.com

end of announcement                               euro adhoc 
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issuer:      Software AG
             Uhlandstr. 12
             D-64297 Darmstadt
phone:       +49 (0)6151 92 1899
FAX:         +49 (0) 6151 92 1933
mail:     investor.relations@softwareag.com
WWW:      http://www.softwareag.com
sector:      Software
ISIN:        DE0003304002
indexes:     TecDAX, CDAX, HDAX, Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
             Hamburg, Stuttgart, Düsseldorf, Hannover 
language:   English
 

 

 



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