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Ad hoc Disclosure according to § 15 WPHG (Securities trading Act)

Software AG decides on share buyback

Darmstadt, Germany, 10/25/2013

Software AG (TecDAX, ISIN DE 0003304002 / SOW) today decided, on the basis of the authority granted by the general meeting of 3 May 2013, to conduct a buyback of own shares in a value of up to EUR 110 million (excluding ancillary costs) during the period until May 16, 2014 at the latest. The limit for a share buyback is 10 percent of the share capital as of 3 May 2013 less other treasury shares, which the Company has previously purchased or still holds or which are attributable to it under the provisions of §§ 71d and 71e AktG (German Stock Corporation Act), which equals 4.724.926 shares. It is intended that the share buyback will be conducted through a bank and exclusively on the stock exchange. The shares bought back may be used for all purposes permissible under the above mentioned authority and applicable stock corporation law.

Further information to Software AG’s Share Buyback Program

Software AG has repeatedly obtained the authorization for share repurchases at the Annual General Meeting and used the last Share Buyback Program (February – April 2013) to the following extent.

As of October 25 2013, Software AG owns an aggregate number of 3,966,818 of own shares, corresponding to 4.56% of the share capital of Software AG.

The cash allocation priority has been based also on dividend continuity and financing acquisitions. Following is further information to the regulatory disclosure:

1) Why a share buyback now?
a. Software AG’s cash on the balance sheet, posted after 9m in 2013, was roughly €448 million. The current interest rate level is still on a low level and is in fact below Software AG’s historical average dividend yield.
b. The current share price is, from the Executive Board point of view, attractive for a repurchase.

2) Why this amount (€110 million)?
The volume corresponds to the given limit of maximum 10 percent of the share capital of Software AG less other treasury shares, which the Company already purchased.

3) How will the repurchased and already bought shares be used?
The repurchased shares may be used for any purpose permissible under the relevant shareholders resolution of the Annual General Meeting of 3 May 2013 and applicable corporation stock law. The resolution states the following purposes:
i. Delivery of shares to the holders of warrants or convertible bonds.
ii. The sale to third parties for the purpose of acquiring companies, parts of companies and / or equity interests in companies or in the context of corporate mergers.
iii. The recall of all or part of the treasury shares with or without reduction of capital.

4) What is the impact of the share repurchase on the published EPS outlook 2013 (in the range of €1.70 to €1.80)?
a. The 2013 outlook for EPS 2013 was already given in January 2013 and therefore is to be understood as net of effects from share buybacks.
b. The reported EPS for fiscal 2013 will tend to increase - to the extent that the treasury shares will reduce the current number of shares outstanding.

5) What is the effect of the repurchase program on the dividend?
a. No effect, Software AG’s dividend policy remains unchanged.
b. The dividend policy is geared towards long-term and consistent dividend payment.
c. The cash-out ratio in recent years was in the corridor of 20-25% of net income.
d. Dividend for fiscal 2013 will also be defined on the base of full year 2013 results in spring 2014.

6) What is the effect of the repurchase program on the acquisition strategy of Software AG?
No effect, Software AG will continue to buy software companies that:
i. Bring technological additions to the product portfolio (technology tuck-ins) or
ii. Provide innovative kernels – such as Terracotta – for further organic growth.

7) When will the share buyback program start?
a. First, Software AG will have to mandate a bank to implement the program.
b. Then, before the program begins, an additional communication will be issued to the capital market. 

About Software AG
Software AG (FRA: 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 and also Alfabet and Apama. Software AG has around 5,300 employees in 70 countries and had revenues of €1.05 billion in 2012 (IFRS, unaudited).

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Software AG | Uhlandstraße 12 | 64297 Darmstadt | Germany

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Software AG
Robert Adolph
Senior Manager Investor Relations
Uhlandstrasse 12
64297 Darmstadt
Tel: +49 6151 92-1237
Fax: +49 6151 92-1933