The first quarter of 2005 at Software AG was characterized by growth in sales and earnings, with EBIT increasing by 19 percent to €18 million. Adjusted for currency effects, sales rose by 6 percent. This positive trend was achieved as a result of effective cost control and the solid development of both business lines; ETS and XML Business Integration. Strategic advances expanded Software AG’s prospects for further growth.

Group sales climbed to €100.3 million in the first quarter of 2005 (Q1 2004: €95.7 million). The 6 percent rise net of currency effects represents the upper limit of our sales growth projection for the year 2005 as a whole.

Strong growth continues in license business
License sales were once again a significant growth driver. Income from new software licenses increased by 16 percent to €27.0 million (Q1 2004: €23.3 million). For the second time in succession, this important segment recorded double-digit quarterly growth.

Dynamic growth for XML Business Integration
XML Business Integration products showed a particularly strong increase in sales. In this strategic growth segment, we are focusing on the rapidly expanding market for the integration of business applications.

Our new integration products are gaining acceptance more rapidly than expected. In combination with proactive marketing activities, the demand resulting from the successful launch caused sales to rise by 36 percent when adjusted for currency effects. Including sales of third-party products in the amount of €1.7 million, the license business of XML Business Integration grew by 52 percent, net of currency of effects, to €6.9 million (Q1 2004: €4.6 million), exceeding even the strong growth of the preceding months.

Enterprise Transaction Systems proves to be a reliable source of growth
Sales of Enterprise Transaction products increased significantly. At €19.9 million, sales in this segment were 9 percent higher than in the first quarter of 2004. A major contract in South Africa boosted sales. The Enterprise Transaction Systems segment has a broad and stable customer base and contributes consistently to revenue.

Project services on the increase
Income from project services grew to €29.2 million (Q1 2004: €28.0 million). The 5 percent rise, net of currency of effects, was primarily a result of the increase in service revenues in the USA. In the maintenance segment, revenues reached €43.7 million, almost unchanged when adjusted for currency effects (Q1 2004: €44.1 million).