AD HOC DISCLOSURE ACCORDING TO § 15 WPHG

Ad hoc: Software AG - The Integration and Process Software Business (BPE) Continues to Grow in Q3 2011

Darmstadt, Germany, October 18, 2011 - After an initial consolidation of the financial results for the third quarter 2011, Software AG (Frankfurt TecDAX: SOW) accounted for license growth in Business Process Excellence (BPE) of 37 percent (at constant currency) to €42 million (previous year € 31.4 million). Growth in the product business (license and maintenance) was 21 percent, at constant currency rates, amounting to €84 million (previous year €72.1 million). The largest increases in sales were reported in North America, Germany, Australia and South Africa.

Sales of software licenses across all business areas improved by 7 percent to €75 million (previous year €69.6 million) or 11 percent at constant currency. The strong growth in BPE license revenue more than offsets the expected decline to €32 million (previous year €36.6 million) in Enterprise Transaction Systems (ETS) sales. With total maintenance revenues stable, Group product revenue (licenses and maintenance) increased to €169 million (previous year €166.2 million), an increase of 5 percent at constant currency.

Software AG generated services revenues of €105 million (previous year €108.3 million) in the third quarter. Of this total, €63 million (previous year €60.5 million) were generated in the BPE and ETS services area and €43 million (previous year €47.8 million) by IDS Scheer Consulting (IDS). Software AG’s new services management team is focused on increasing profitability accepting slower revenue growth during this transition phase.

Total Group turnover was €275 million (previous year €275.3 million), an increase of around 2 percent at constant currency rates. The continuing strength of the Euro in the third quarter resulted in lower stated revenues of approx. €7 million as foreign currency sales are converted into Euro. Through a stronger focus on profitability in the services business, IDS Scheer Consulting successfully managed a turnaround in earnings in the third quarter and will significantly increase its contribution to results in the second half of the year.

Overall in the third quarter, the Software AG group achieved an operating profit (EBIT) of approx. €71 to €73 million (previous year €69.1 million).

Software AG considers itself to be well on the way to achieving its full year growth targets in its core business, the sale of software licenses and maintenance. The ETS product revenue for the first nine months is 1 percent under the 2010 year level. This performance confirms the forecast for the full year 2011 of ETS product revenue within plus or minus 2 percent of the 2010 level. After nine months the BPE business division has delivered 10 percent revenue growth at constant currency rates. There is strong customer interest in integration and process software and this will continue to generate double digit growth, despite the macro-economic uncertainties. Therefore, the company confirms its product revenue growth target for 2011 of 10 to 15 percent at constant currency.

In the IDS Scheer Consulting business division the company will remain focused on profitable projects. For the full fiscal year, this will have two consequences: first an expected increase in the EBIT margin of around 200 basis points to approx. 26 percent (previous year 24.0%); and second a total Group revenue growth of between 2 to 5 percent at constant currency. The profit after tax will therefore be 10 to 15 percent over the €175.6 million reported in 2010.

The detailed financial results will be published by Software AG on October 27, 2011.