We believe our decision to concentrate on two core business lines will generate sufficient revenues to offset the withdrawal from non-strategic areas. XML license sales are expected to pick up in the second half of the year, particularly as a result of the launch of our XML Integration Packages in the second quarter. Moreover, the Project Services division is expected to benefit from increasing revenues from integration work.

At the same time, we will continue to reduce operating costs, partly as a result of the ongoing consolidation of R&D activities. Improvements in operating margin, additional cost savings, and healthy cash flows will further strengthen Software AG’s finances. Against this background, we expect full-year operating profit to exceed the 2003 figure by around 25 percent.