Software AG’s growth gained momentum in 2005: Driven by the licensing business, sales rose by 6.5 percent. Increases in earnings, a stronger market presence and a wider product portfolio assure that the Company will continue to develop positively.

Economic trends

Global economy shows strong performance
In 2005, the world economy expanded by 4.3 percent, again reflecting growth exceeding the average of recent years. The United States and Asia provided the greatest stimuli to this expansion. According to OECD calculations, the real gross domestic product rose in the U.S. by 3.6 percent. Adverse economic effects from the hurricanes were compensated by high domestic demand and a monetary policy designed to stimulate the economy.

A similar upward trend was witnessed in Asia, where the emerging economies propelled the continuing growth in the region. China was in first place with an increase of 9.3 percent. The Japanese economy proved unexpectedly stable, profiting primarily from corporate investment.

Revival in Latin America
The South American economy revived considerably due to high demand for raw materials and agricultural products. Chile was among the countries showing higher than average economic growth, with a rise in GDP of 6.0 percent. In Latin America, growth exceeded 4 percent for the second consecutive year. Panama and Venezuela both achieved extraordinary increases of 6 percent and 9 percent respectively. According to the United Nations’ Economic Commission for Latin America and the Caribbean (CEPAL), corporate investment surged in particular in Latin America, where capital spending now accounts for 22 percent of the gross domestic product.

Differing trends in Europe
The flourishing global economy also bolstered the European economy. The new EU countries, which grew by 4 percent on average, performed better than the established member states of the European Union. Above all the Eastern European economies gained significantly in strength, with the Russian economy surging by 5.5 percent.

While the eurozone countries benefited from slightly improved exchange rate parities, the rise in GDP still fell short of the previous year. The growth rate of 1.4 percent reflects the weak domestic market and the influence of higher export figures. German economic output rose by approximately 1 percent during 2005 in response to strong export growth. In the second half of the year, the German economy benefited from a renewed rise in capital spending.