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.
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).
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).