As a result, Software AG stock outperformed both the TecDAX and the Nasdaq 100 by a clear margin. The TecDAX rose by 9.8 percent and the Nasdaq 100 fell by 2.0 percent, while the price of Software AG shares rose 29.1 percent.

This reflects growing investor confidence in Software AG. As a result of the strategic focus on Enterprise Transaction Systems (ETS) and XML Integration announced in early December 2003, we succeeded in convincing not only our customers, but also financial analysts and investors of the positive outlook for the Company and for Software AG shares. Financial results for the fourth quarter of 2003 and the first three months of 2004 significantly exceeded market expectations. The program of cost savings initiated in 2003 has significantly raised profitability, leading to improved ratings. Forecast earnings per share for 2004 have been revised upward to between €2.50 to €2.60. This includes approximately €0.88 in proceeds from the sale of holdings.

Improved ratings from financial analysts
During the first quarter of 2004, investor relations concentrated on communicating the benefits of the new business strategy. At two investor conferences, and by means of a large number of face-to-face meetings with analysts and investors, we provided information on the new strategy and on Software AG’s potential. Press and analyst earnings conferences for year-end 2003 and first-quarter 2004 were broadcast live via the Internet, and the presentations are available as downloads. We also organized a special event at Company headquarters for financial analysts, who are important opinion leaders with influence over both private and institutional investors. These activities contributed to improved ratings from financial analysts: The number of sell recommendations fell from seven to two, and the number of hold recommendations from six to four. At the same time, buy recommendations increased from seven to twelve. The average share-price target was increased several times during the course of the first three month, reaching €29 after first-quarter results were published on April 27, 2004.