Please activate JavaScript!
Please install Adobe Flash Player, click here for download

SAW QB2 2014, englisch

InterimManagementReport Exchange rate effects As in previous quarters, exchange rates also had an extremely negative effect on ­Software AG's global revenue in the quar- ter under review. The continued strength of the euro caused exchange rate fluctuations to reduce Group revenue by €5.4 million year on year. All three business lines were affected, though maintenance suffered the greatest loss with −€3.9 million. The effects on consulting and license revenue were −€1.0 million and −€0.5 million respectively. With regard to the whole first half of fiscal 2014, exchange rate effects decreased ­Software AG's global revenue by €15.1 million. The percentage of total revenue in euros rose to 41 percent (2013: 37 percent). The U.S. dollar accounted for the largest percentage in foreign currency with 22 percent (2013: 23 percent), which was equal to last year. The remainder of ­Software AG's second-quarter revenue was generated pri- marily in the United Kingdom (7 percent), Brazil (5 percent) and Israel (5 percent). Earnings performance ­Software AG lowered its cost of sales in the three-month period by 14 percent to €62.9 million (2013: €73.5 million). The reduction is mainly due to the consolidation of the Consulting business line. As a result of the targeted cost cuts, ­Software AG's gross margin remained at the high level of the previous year at 67.9 percent (2013: 69.1 percent). Research and development expenses in the second quarter of 2014 totaled €26.6 million (2013: €26.2 million). Due to efficiency programs and optimized back-office processes, ­Software AG lowered its general and administrative expenses by 9 percent from €17.4 million to €15.9 million. Sales and marketing expenses went down to €64.2 million (2013: €73.9 million). Following major investments associated with the company's global sales and marketing initiative in 2013 and with the sluggish trend in license revenue in the current year, these expenses decreased by nearly €10 million. Earnings before interest and taxes (EBIT) were €25.0 million (2013: €44.4 million). The 44-percent decline year on year is a result of the decrease in product revenue and the initial consolidation of the SAP consulting business. Accordingly, ­Software AG's EBIT margin was 12.8 percent (2013: 18.7 percent). Because many competitors—particularly in the USA—do not use the IFRS accounting standard, ­Software AG has included non-IFRS operating earnings in its financial reporting in order to improve comparability. This figure is calculated based on EBIT (before all taxes) adjusted for: • Amortization of acquisition-related intangible assets • Reduction of acquisition-related product revenue through purchase price allocation • Other acquisition-related effects on earnings • Share price-based remuneration • Restructuring/severance payments • Earnings from divested business units (Q2) Operating (non-IFRS) income was €45.1 million (2013: €58.7 million); accordingly the operating (non-IFRS) margin was 23.0 percent (2013: 24.7 percent). ­Software AG's tax rate rose in the second quarter of 2014 to 36.6 percent as compared to the same period last year at 32.9 percent. High tax payments particularly in the U.S. and Germany had an impact. Due to increased financing costs related to the placement of promissory notes, net fi- nancial expense rose to −€2.6 million (2013: −€1.5 million) in the second quarter. ­Software AG placed promissory notes worth a total volume of €300 million (of that 65 million were in U.S. dollars) at the beginning of the second half of 2013. Net income fell to €14.2 million (2013: €28.8 million). Earn­ ings per share were therefore €0.18 (2013: €0.34) in the quarter under review. 11 Share Interim Management Report Interim Financial Statements Notes to the Interim Financial Statements Additional Information Significant Events During the Reporting Period Financial Performance Financial Position Assets Events After the Balance Sheet Date Risks and Opportunities Outlook