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Revenue and results beat expectations
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Software AG’s annual revenue reached €422.2 million in 2003. The operating results rose
31.3 percent to €41.5 million. A combination of positive cash flow and profitability strengthened
the company’s financial independence and laid the basis for further growth in 2004.
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Global economy on the road to recovery
After several sluggish years, the global economy
began to gain momentum toward the end of 2003.
The first signs of recovery early in the year were
followed by a significant upturn in the summer.
Especially in industrialized countries, the climate
visibly improved. Ahead of the pack were the USA
and UK; and in East-Asian emerging markets,
where confidence had taken a battering in spring in
the wake of the SARS epidemic, real GDP began to
pick up again. In the second half of the year, it was
the eurozone’s turn – gathering strength as the
year came to a close. The transition economies of
Central and Eastern Europe were no exception –
here output also began to climb.
Germany’s economic troubles, by contrast,
stretched into the summer and by year-end, GDP
was 0.1 percent below the figure posted for 2002.
Falling exports due to the slump of the US dollar
were largely to blame. Over the course of 2003,
the euro gained 20 percent over the US dollar,
seriously denting the competitiveness of eurozone
countries.
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Strong signs of economic recovery |
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But another difficult year for IT
The fortunes of the IT market were also closely
linked to the overall economic performance in
2003. Companies responded to uncertain growth
prospects by maintaining a tight rein on IT budgets.
So yet again, the software market faced a raft
of postponed and downscaled projects. By the
end of the year, demand began to pick up across
the world, but to varying degrees. In the US, for
example, corporate investment in new software,
particularly in the fourth quarter, was one of the
most important drivers of the economy. And in the
eurozone, indications of an upturn in IT demand
began to grow from the summer onward. Reliable
signs of recovery, however, did not appear until
the end of the year.
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IT demand stabilizes in second half of year |
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The watchwords: investment protection and integration
Quick results remained at the heart of IT spending
decisions – as measured by rapid, quantifiable
return on investment (ROI) and return on assets
(ROA). As a result, demand remained strong for
integration solutions: protecting investment by
building bridges between old and new systems
is a high priority.
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