Archive of Quarterly Reports 2011

Quarterly and Full Year Results

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Software AG reports stable revenue and earnings for fiscal year 2011

Software AG (Frankfurt TecDAX: SOW) reported revenue of €1.1 billion in fiscal year 2011, stable at the previous year’s record level. The company’s Business Process Excellence (BPE) business line returned revenue of €528 million, up 7 percent (at constant currency) from €499 million in 2010. The Group EBIT margin was up by 50 basis points to 24.5 percent delivering an EBIT of €269 million (€269 million in 2010). Profit after tax was €177 million (€176 million in 2010) slightly over the previous year. Software AG had a total of 5,535 employees as of December 31, 2011 (previous year 5,644). The number of employees in Germany was 1,881 (previous year 2,051).

The fiscal year 2011 confirmed Software AG's strategy, with the Business Process Excellence growth segment reporting an increase in license, maintenance and services revenue to a record level of €528 million. The BPE business line was again the main revenue generator of the Group and its net business result increased to a new record high of €154 million.

3Q2011: Profit and Margin Increased in the 3rd Quarter 2011

Software AG (Frankfurt TecDAX: SOW) today announced the full results for the third quarter and the first 9 months of 2011. The figures confirm the preliminary quarterly results, published on October 18, 2011, and the significantly strong growth in BPE license revenue, up 37 percent at constant currency rates. Both the associated increase in product revenue and the financial turnaround in the IDS Scheer Consulting business raised the EBIT margin by 110 basis points to 26.2 percent in the third quarter. In the first nine months, Software AG's operating profit (EBIT according to IFRS) was increased by 10 percent to €191.2 million (previous year €174.6 million). Reduced interest expenses and a constant tax rate increased net earnings during the year by 13 percent to €125.3 million (previous year €111.0 million). Based on the 9-month results Software AG confirms its annual forecast for product revenue and profit growth.
"The BPE business division’s role as the Group growth driver was again confirmed and we recorded the most successful third quarter in company’s history", CEO Karl-Heinz Streibich commented on the financial results.

Software AG’s third quarter and nine month financial results again demonstrated further improvement, reflected particularly in the increase in operating and net earnings. A decrease in interest expense was also achieved through continuous debt reduction (net debt was reduced in the last 12 months by 26 percent to €143.4 million, despite acquisitions and dividend payments) as well as through reduced debt financing costs. In the first nine months the financial result was improved by 40 percent (i.e. €4.5 million) to -€6.8 million (previous year -€11.3 million). The pre-tax profit was increased by 13 percent and amounted to €184.4 million (previous year €163.3 million). Shareholder’s equity was increased by 28 percent to €870.5 million (in comparison to 30.09.2010). The equity ratio was raised to 52.3 percent (43.8 percent on the 30.09.2010).

Software AG reaffirms the original full year 2011 target growth in BPE product sales of 10 to 15 percent in constant currency. The company expects the ETS revenue to be 2 percent above or below the previous year’s total, in line with the full year forecast. In the IDS Scheer Consulting business, Software AG will remain focused on high-margin projects in the fourth quarter. This will lead on one hand to an increase in the Group EBIT margin of approximately 200 basis points to around 26 percent (previous year: 24.0 percent) and to revenue growth of the group of 2 to 5 percent, at constant currency, on the other. Profit after tax remains unchanged with expected growth of 10 to 15 percent over the previous year’s €175.6 million.     

2Q2011: Software AG increases quarterly earnings and confirms growth forecast for 2011

Software AG (Frankfurt TecDAX: SOW) increased its net income by 3 percent to €38.7 million in the second quarter of 2011, compared to the same period in 2010. Total revenue remained steady at €257.1 million (at constant currency rates). The operating income (EBIT according to IFRS) of €58.9 million is the same as the previous year. However, the company improved its EBIT margin to 22.9 percent (2010: 22.0%) and free cash flow climbed by 26 percent to €45.9 million. Software AG confirmed its 2011 annual forecast for revenue and income growth.

First half of 2011
Group revenue amounted to €529.7 million (2010: €517.6 million) during the first six months of the current fiscal year. That is an increase of three percent at constant currency. Product revenue for this period also grew by 3 percent at constant currency to €315.8 million. Revenues from the services business grew during the reporting period to €211.1 million (2010: €206.7 million).

EBIT (IFRS) jumped by 13 percent to €119.1 million (2010: €105.5 million) in the first half of 2011. During that same time period, the EBIT margin grew to 22.5 percent (2010: 20.4%). Further debt reduction and optimized debt financing lowered interest expenses. Combined with an improved tax rate, this led to higher net income of €78.7 million (a rise of 20%). In the process, liquid assets increased by €92.2 million to €194.6 million, and the equity ratio climbed to 49 percent (2010: 41%).

1Q2011: Software AG reports Q1 2011 growth according to plan

Software AG further increased revenue and earnings according to plan in the first quarter of 2011, reconfirming the company’s sustained growth path. Product revenue in the first three months climbed year-over year by 12 percent, to €164.3 million, while Group revenue grew by 9 percent to €272.6.

Operating income (EBIT) surged by 29 percent to €60.2 million. The cost synergies arising from the merger with IDS Scheer AG have had a particularly positive effect. Net income jumped by 43 percent to €40.0 million, and earnings per share were up to €1.41. The revived demand for IT, noted at the CeBIT trade show, was confirmed in the first quarter. During the year, the company expects an increase in process innovation projects and affirms the growth forecast for the full year 2011, published in January.  
     

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