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  First nine months of fiscal 2004
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  First nine months of fiscal 2004  

Stable revenues with increased license sales
Consolidated revenues for the first three quarters of 2004 totaled €298.6 million. The slight year-on-year dip in sales of 2 percent is solely attributable to the buoyant euro. Adjusted for currency translation effects, revenues rose by 1 percent. Product revenues (licensing and maintenance) increased to €214.6 million (€212.3 million in 2003). Licensing alone generated €77.7 million (€68.7 million), representing an increased share of total revenues from 23 percent to 26 percent. On September 30, 2004, the Software AG Group employed 2,468 employees, 333 fewer than on September 30, 2003.

Breakdown of revenues

Ninefold increase in EBIT
There was a significant improvement in the Software AG cost base during the period, with administrative, sales, and R&D expenses falling by €26.0 million over 2003 to €135.8 million. The largest percentage saving was realized for R&D costs, which fell 22 percent, followed by administrative costs, down 18 percent.

EBIT, which rose from €9.4 million to €84.9 million, includes exceptional income in the amount of €24.5 million. This sum was generated by the second-quarter divestment of Software AG’s stockholding in SAP Systems Integration AG (SAP SI).

Earnings development

High cash flow, healthy balance sheet
Restructuring costs during the period were nearly twice the 2003 figure, at €23.4 million. The organic cash flow increased to €42.4 million (€40.9 million). Free cash flow also rose, to €11.4 million (€5.7 million).

Total assets climbed to €515.2 million (€494.2 million), in spite of a reduction in fixed assets through the SAP SI share sale. Cash and cash equivalents rose to 21 percent of assets, at €110.2 million (€74.8 million in 2003). The company has no bank debt. The rise in equity, up at €312.7 million, took the equity-to-total-assets ratio to 61 percent (53 percent in 2003).

  Interim Report Q3/04 (PDF)
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