Fiscal 2008: A good year for Software AG
- Group revenue rises 16 percent to €720.6 million
- Product revenues increase 19 percent to €539.1 million
- webMethods division improves sales by 33 percent to €315.7 million
- Free cash flow climbs 62 percent to €133.4 million
- Operating earnings grow by 32 percent to €180.5 million
Darmstadt, Germany, 1/27/2009
Software AG (Frankfurt TecDAX: SOW) continued to grow in the fiscal year 2008. Group revenue (IFRS) rose by 16 percent to €720.6 million (2007: €621.3 million). Product revenues increased by 19 percent to €539.1 million (2007: €454.2 million). Operating earnings (EBIT) grew by 32 percent to €180.5 million (2007: €136.8 million) while net income rose 31 percent to €115.9 million in 2008 (2007: €88.4 million). Software AG’s successful entry into the Brazilian market, the smooth integration of webMethods and continued organic growth in the new webMethods division contributed to the good performance in fiscal 2008.
Highlights in 2008
2008 was the most successful year in the history of Software AG. All key performance indicators showed significant improvement. The ETS business division, comprising of the Adabas and Natural data management products, continued to grow, particularly thanks to our expansion into the Brazilian market. ETS generated Group revenue of €404.9 million, reflecting an increase of 6 percent over the previous year (2007: €383.1 million). The webMethods business division increased sales by 33 percent to €315.7 million (2007: €238.1 million) as a result of organic growth and the acquisition of webMethods, Inc., consolidated as of May 25, 2007. The new webMethods division contributed 44 percent to Group revenue in 2008. This represented a substantial increase over the 38-percent contribution in 2007 and reaffirms the Company’s strategy of using webMethods to address the growing market for integration software (SOA/BPM). Software AG established webMethods as a second division, in addition to ETS, to provide long-term growth for the Company. Another positive factor was the continuing good performance of free cash flow, which again rose in the year under review, increasing 62 percent to €133.4 million (2007: €82.2 million).
Karl-Heinz Streibich, CEO of Software AG, commented: “In fiscal 2008, we showed that we have a sound business model and are well positioned in the market. We have proven ourselves able to maintain our success in times of economic difficulty and are growing during the crisis. That is one advantage of enterprise software: customers are willing to make investments when the benefits of IT projects to their businesses are clear.”
CFO Arnd Zinnhardt adds: “The fact that net income saw another significant increase in fiscal 2008 is evidence of our consistent implementation of process optimization and demonstrates how successful the integration of webMethods has been. The sustained strong performance of cash flow is particularly encouraging, as this supports our strategic business development by providing liquidity.”
Successful fourth quarter in 2008
Software AG’s fiscal 2008 ended with a good fourth quarter: Q4 Group revenue increased 14 percent to €212.4 million (Q4 2007: €186.5 million), while EBIT improved by 28 percent to €54.9 million (Q4 2007: €42.8 million). Group licensing revenue rose 10 percent to €87.5 million in the fourth quarter of 2008 (Q4 2007: €79.8 million). Performance of the maintenance business was especially pleasing: revenue rose 27 percent to €75.7 million in the fourth quarter of 2008 (Q4 2007: €59.4 million). All in all, ETS contributed 57 percent to fourth-quarter revenues and webMethods 43 percent. Free cash flow improved by 12 percent, increasing to €42.2 million in Q4 2008 (Q4 207: €37.8 million).
Forecast for 2009 confirmed
Software AG intends to continue growing profitably in fiscal 2009. However, the uncertain global economy makes it difficult to predict performance, for which reason our forecast for 2009 is more cautious than in the prior year. “From a current perspective, we anticipate a currency-adjusted increase of 4 to 8 percent in Group revenue,” said Karl-Heinz Streibich. The EBIT margin is expected to range between 24.5 and 25.5 percent. In terms of operations, fiscal 2009 will focus on continuing to develop the markets in Brazil and Japan and expanding the consulting and product business in our new, high-growth webMethods business line.
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- Employees in Germany
Software AG | Uhlandstraße 12 | 64297 Darmstadt | Germany
Software AG is the world’s largest independent provider of Business Infrastructure Software. Our 4,000 global enterprise customers achieve business results faster by modernizing, integrating and automating their IT systems and processes. As a result, they rapidly build measurable business value and meet changing business demands. Based on our solutions, organizations are able to liberate and govern their data, systems, applications, processes and services – achieving new levels of business flexibility.
Our leading product portfolio includes solutions for high performance data management, developing and modernizing applications, enabling service-oriented architecture, and improving business processes. By combining our technology with industry expertise and best practices experience, our customers improve and differentiate their businesses – faster.
Software AG has almost 40 years of global IT experience and over 3,600 employees serving customers in 70 countries. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW). Software AG posted total revenues of €621 million in 2007.
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