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Software AG interim report 2 2013

13 04 SOFTWARE AG’S SHARE 09 Interim Management Report 22 interim Financial Statements 30 Notes to the Interim Financial Statements 44 Service €42.8 million (2012: €45.6 million). BPE maintenance ­revenue at €48.6 million (2012: €48.1 million) was just up from the previous year’s strong result. This offset the decline of ETS maintenance. Due to a delay in the signing of license agreements worth double-digit million sums until just shortly after the second quarter ended, BPE product revenue did not meet expect­ ations for the quarter. BPE sales successes included a large deal for Software AG Government Solutions, a sales unit which was recently established in the USA. The Software AG subsidiary, specialized in the public sector, closed its biggest deal yet in July, shortly after quarter’s end, with a U.S. government agency worth a total value of $17 million. Approximately $10 million of that amount is recognized as BPE licenses. This is a positive confirmation of Software AG’s strategy of increased investments in sales and marketing, especially in the USA, and creating a Software AG business unit for the U.S. public sector. The strongest engines for BPE growth in the second quarter proved to be Latin America and the Asia-Pacific & Japan (APJ) region where double-digit growth rates were achieved for the eighth consecutive quarter. Software AG Latin America, for example, secured the largest ARIS order with a volume of more than €5 million. Australia is evolving into a solid anchor for business in the APJ region. These rapidly growing regions achieved faster growth than competitors in the same regions with double-digit growth rates in license revenue. 2.2 Revenue and earnings by business line (Segment Report) Software AG’s total revenue in the second quarter of 2013 was €237.7 million and was distributed among the three business lines as follows: product revenue This revenue distribution reflects the sales mix’s positive trend toward the BPE line. This is confirmation of the success of Software AG’s strategic focus on the growth potential of integration and process software. As a result, the contribu- tion of BPE products to Group rev­enue rose to 38.4 percent in the quarter under review. ETS contributed 31.9 percent and Consulting 29.7 percent to Group revenue. Business Process Excellence (BPE) Investments in future-oriented technologies and focused global market development in the Business Process Excel- lence (BPE) line began to generate the first results. The BPE business line made the largest contribution to Group rev­ enue again in the second quarter of 2013. At €91.4 million (2012: €93.8 million) this line’s revenue approximated the previous year’s level; operationally, or at constant currency, this is a slight increase. License revenue for the quarter was ETS 31.9 % Consulting 29.7 % BPE 38.4 % SIGNIFICANT EVENTS DURING THE REPoRTING PERIOD 09 FINANCIAL PERFORMANCE 12 FINANCIAL POSITION 19 EMPLOYEES 20 OPPORTUNITIES AND RISKS 20 EVENTS AFTER THE BALANCE SHEET DATE 21 OUTLOOK 21