2. Financial performance

3/3 previous

Segment earnings contributions
The webMethods division contributed €23.4 million to earnings in Q2 2008 (Q2 2007: €13.4 million), representing an increase of almost 75 percent. Cost of sales increased by 20 percent to €28.9 million (Q2 2007: €24.0 million) due to revenue growth. Selling expenses increased slightly to €24.4 million (Q2 2007: €24.2 million). These figures underline the planned increase in process efficiency as well as the full realization of synergy effects.

Our ETS division even exceeded the high segment contribution it achieved in Q2 2007, rising by 2 percent, from €56.7 million to €57.8 million in Q2 2008. In the process, selling expenses increased faster than revenue, reaching €15.4 million, compared to €13.0 million in the previous year. This increase can be attributed primarily to the build-up of our business in Brazil. Cost of sales, on the other hand, decreased by 10 percent to €18.9 million in Q2 2008 (Q2 2007: €20.9 million).

Net income and earnings show positive growth
Net income grew from €24.6 million to €27.1 million in Q2 2008: an increase of 10 percent. Earnings per share rose to €0.95, compared to €0.86 in Q2 2007. As of June 30, 2008, there were 28.6 million shares (undiluted) issued and outstanding, approximately 130,000 more than on the previous year’s balance sheet date.

Half-year figures support ambitious forecasts for the fiscal year
Group revenue reached €328.2 million in the first half of 2008. It therefore grew by 19 percent compared to the figure of €276.9 million for the first half of 2007. Currency-adjusted revenue grew by 26 percent. Licensing revenue in this period rose by 12 percent (currency-adjusted: 21 percent) to €116.8 million (H1 2007: €104.2 million). Maintenance revenue grew by 36 percent following currency adjustment to €121.1 million (H1 2007: €95.8 million). Revenue from services totaled €88.7 million, compared to €74.3 million in the previous year.

Earnings before interest and taxes (EBIT) rose to €77.0 million in the first six months of 2008, up 25 percent (H1 2007: €61.7 million), leading to an increase in the EBIT margin from 22.3 to 23.5 percent. Operating cash flow achieved a particularly high value of €60.2 million, 75 percent higher than on June 30, 2007.