Corporate | 15 July 2014 00:22


Software AG: DELAYS IN LARGE-DEAL PROJECTS SLOWS LICENSE GROWTH – TARGET OPERATING MARGIN BETWEEN 26 AND 28 PERCENT


Software AG / Key word(s): Preliminary Results/Change in Forecast

15.07.2014 / 00:22


Ad-hoc release according to § 15 WpHG
DELAYS IN LARGE-DEAL PROJECTS SLOWS LICENSE GROWTH –
TARGET OPERATING MARGIN BETWEEN 26 AND 28 PERCENT

[Note: All figures are provisional and rounded and may possibly still change.
All percentages in the text are at constant currency.]

Darmstadt, July 14, 2014 – After an initial consolidation, Software AG (Frankfurt TecDAX: SOW) announced preliminary financial results for the second quarter of 2014. While sales in the ETS business developed as expected, the BPE business line was marked by a surprising reluctance by customers to commit to major infrastructure projects. Accordingly the annual forecast has been adjusted.

The Business Process Excellence (BPE) division had revenues of EUR85 million (previous year: EUR91.4 million) in the second quarter. License revenue with EUR33 million (previous year: EUR42.8 million) was under the previous year’s level. Maintenance revenue, however, rose in the second quarter to EUR52 million (previous year: EUR48.6 million), an operating growth by 11 percent.

The traditional database business Enterprise Transaction Systems (ETS) was in line with expectations, with sales of EUR56 million (previous year: EUR75.8 million). License revenue amounted to EUR17 million (previous year: EUR32.6 million). ETS maintenance revenue was around EUR38 million euros (previous year: EUR43.1 million).

The Consulting division reported revenues of around EUR56 million (previous year: EUR70.5 million). The main reason was the deconsolidation of the SAP service activities. After the sale of the business focused on third-party solutions, Software AG will concentrate exclusively on the development, distribution and service of its own products.

The operating profit (non-IFRS) decreased in the second quarter to EUR45 million (previous year: EUR58.7 million); this corresponds to an operating margin of 23 percent. The reported EBIT (IFRS) was impacted by one-off effects from the deconsolidation of the SAP consulting business and is approximately EUR25 million (previous year: EUR44.4 million).

Outlook
Due to the significant delays in major projects in the second quarter, the Group now expects full year 2014 BPE revenue to remain approximately at the previous year’s level. Revenue forecast in the traditional database business ETS remains unchanged at a reduction of 16 percent to 9 percent (net of currency effects). The company expects an operating margin (non-IFRS) of 26-28 percent for the full year 2014 (previous year: 26.8 percent).

Software AG will give further details in a conference call on July 15, 2014 at 09:00 clock CET. Dial-in details are as follows: Germany +49 (0) 69 566 036 000 | UK +44 (0) 203 059 5869 | USA +1 (1) 631 302 6547. The company will publish its full quarterly results on 24 July 2014.

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About Software AG
Software AG (Frankfurt TecDAX: SOW) helps organizations achieve their business objectives faster. The company’s big data, integration and business process technologies enable customers to drive operational efficiency, modernize their systems and optimize processes for smarter decisions and better service. Building on over 40 years of customer-centric innovation, the company is ranked as a “leader” in fifteen market categories, fueled by core product families Adabas and Natural, ARIS, Terracotta, webMethods, Alfabet and Apama. Software AG has more than 4,600 employees in 70 countries and had revenues of 973 million in 2013. Learn more at www.softwareag.com

Software AG – GetThereFaster
Software AG | Uhlandstraße 12 | 64297 Darmstadt | Germany

Detailed press information about Software AG including a picture and multimedia database are available at: www.softwareag.com/press

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Contact:

Byung-Hun Park
Senior Manager Financial Communications
Uhlandstrasse 12
64297 Darmstadt
Germany

Tel: +49 (0)6151 92 2070
Fax: +49 (0)6151 92 34 2070
E-Mail: byung-hun.park@softwareag.com
http://www.softwareag.com
Barbara Kögler
Senior Vice President Corporate Communications
Uhlandstrasse 12
64297 Darmstadt
Germany

Tel: +49 (0)6151 92 1574
Fax: +49 (0)6151 92 34 1243
E-Mail: barbara.koegler@softwareag.com
http://www.softwareag.com



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Language: English
Company: Software AG
Uhlandstraße 12
64297 Darmstadt
Germany
Phone: +49 (0)6151 92-1900
Fax: +49 (0)6151 92-34 1899
E-mail: Investor.Relations@softwareag.com
Internet: www.softwareag.com
ISIN: DE0003304002
WKN: 330400
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart
End of News DGAP News-Service

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