Licensing contributes one quarter of
The first half year at Software AG was characterized
by rising license sales, up 15 percent over 2003 at
€ 52.6 million (€ 45.8 million). This represents an
increase from 22 to 26 percent of total revenues.
Including licenses and maintenance, and excluding
currency effects, product sales gained 5 percent to
€ 143.5 million (€ 141.2 million). Total consolidated
first-half revenues reached € 202.0 million
(€ 206.3 million) – growth of 1 percent before currency
Considerable cost reductions
Software AG continued to bring down expenses
during the first half of the year. Compared to the
first six months of 2003, costs for administration,
sales, marketing and distribution, and R&D fell by a
total € 19.3 million to € 90.9 million (€ 110.1 million).
As a result, operating profit climbed by 55 percent
to € 39.4 million.
Significant improvement in cash flow
In spite of restructuring costs totaling € 19.3 million,
net cash nearly doubled, rising to € 10.4 million
(€ 5.3 million). Taking into account factoring, restructuring
payments, and tax claims, organic cash
flow rose to € 35.2 million, or 17.4 percent of total
Shareholders’ equity rises by € 45.3 million
At June 30, 2004, cash and cash equivalents amounted
to € 110.5 million, exceeding the 2003
figure by € 35.4 million. This was largely due to
the sale of Software AG's stockholding in SAP SI.
Shareholders' equity advanced to € 301.5 million,
taking the equity-to-total-assets ratio to 57 percent.
Total assets rose to € 533.1 million (€ 520.3 million).
The reduction in fixed assets was due to the
disposal of SAP SI shares.
Employee structure increasingly international
Restructuring of the Software AG workforce was
completed sooner than expected: On June 30, 2004,
the Group had 2,467 employees (2,896). This figure
may rise slightly during the second half of the year.
Approximately two thirds of the entire workforce
are based outside Germany, which reflects the
highly international structure and orientation of
Software AG, and demonstrates the success of our
efforts to create a lean holding company.