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  Key figures
  Introduction by the Executive Board
  Share performance
  Overview of business development
  Interim statement
  Financial Calendar
  Increased focus on core business generates added value  
  Karl-Heinz Streibich
Chief Executive Officer
Software AG has achieved a great deal over the past months and this is clearly reflected in our results for the first half of 2004. Operational improvements are going hand in hand with financial success.


Our growth strategy consists of four consecutive stages: Rightsizing, greater focus, development of the organization’s portfolio and expansion. The first two stages have been completed and we have reached the following important milestones:

  • Increase profitability through the company rightsizing.

  • A clear company focus on two business lines, representing our core competencies, as a result of restructuring.

Customer requirements are at the heart of everything we do
Our main goal during the first half of this year was to strategically refocus the company on Enterprise Transaction Systems and XML Business Integration. In line with our Customer First program, this helped us improve our performance in critical areas. For example, both business lines now benefit from highly effective, global product management. We have intensified international marketing efforts, leveraging successful strategies across regions. We have raised revenues by making our sales activities more customer-focused; and are fostering greater innovation by establishing new research and development centers.

Against this background, we have significantly strengthened our market position in both business lines: Enterprise Transaction Systems benefited almost immediately from increased growth and XML Business Integration is now enjoying improved conditions for business development.

A broader, solution-driven portfolio
We also started implementing the third stage of our strategy during the first six months:

  • We optimized our product offerings and began the definition of a fuller portfolio based on market and customer requirements.

During the first quarter, we launched our new product packages for the modernization of enterprise transaction systems. The second quarter saw the international launch of XML Business Integration packages for systems integration with further packages to follow. Customer response to our optimized product portfolio has been very positive. The increased demand that this has generated will help both business lines to make further progress throughout the year.

Strong position in the integration solutions growth market
Over the coming months, we will continue to cement our new strategy based on our core competencies. This will entail assigning relevant R&D activities to the XML Business Integration or Enterprise Transaction Systems business lines. This will enable us to better address the specific characteristics and needs of both market segments.

The reorganization of R&D will accelerate innovation and expertise in our two business lines. Moreover, we will be able to recognize and respond more rapidly to changing requirements in the fast-moving XML market. This will clearly position Software AG as a pioneering and leading provider of integration solutions.

Geographical expansion offers exciting new opportunities
During the second half of 2004, we aim to activate additional drivers of business success.

  • We will look to grow both organically and via strategic acquisitions and partnerships.

We intend to benefit from the considerable potential of promising growth markets through an increased presence. And we have already taken the first steps, for example in China, Russia, and South Africa.

Looking back at the first six months of this year, I truly believe that Software AG is heading in the right direction. We are well prepared to face the challenges of 2005.


Karl-Heinz Streibich
Chief Executive Officer

  Interim Report Q2/04 (PDF)
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