Stock markets sensitive to oil price
Once again in the third quarter of 2004, the price of oil was the key macro-economic factor on global bourses. As the cost of ‘black gold’ continued to escalate, the economic outlook worsened. Major indices such as the Dow Jones and DAX were affected, posting negative third-quarter development. Tech stocks also took a tumble, with considerable losses for the TecDAX and Nasdaq 100 between July and September.

However, despite the broader economic woes, Software AG shares bucked the trend to continue the positive development of the first six months. Having ended 2003 at €16.30, stock closed trading on September 20 at €26.51 – significantly outperforming tech-stock benchmarks TecDAX and Nasdaq 100. These indices posted losses of 8 percent and 4 percent, respectively.

Increased interest from US investors
We stepped up IR activities in the third quarter, making important contacts at investor conferences and roadshows in Germany and leading European financial centers. However, these events were not restricted to Europe: We responded to increased US interest by holding two investor conferences in New York. In the future, we will increase efforts to attract investment from North America.

The number of analysts providing coverage of Software AG shares remained high in the third quarter, at 21. Positive recommendations remained at 16, following publication of third-quarter results on October 28. Four analysts rated the stock as “sell” or “underperform”. One “hold” was downgraded to a “sell”. And there is one remaining “hold” recommendation. The average target price was €30.

Quarterly reports available in innovative new XBRL format
Since October 2004, Software AG quarterly reports have been available in a new format: The traditional HTML, PDF, and print versions are now supplemented by XBRL (eXtensible Business Reporting Language). XBRL is a freely available XML-based standard for handling corporate financial information, designed to significantly streamline the exchange and comparison of data. The new language enables direct access, rapid availability, and automatic processing. This benefits financial institutions, investors, companies, and analysts. This will cut the costs of generating, publishing, and distributing financial data. Furthermore, automatic conversion, rather than manual transfer, will increase the quality and integrity of data.

We are also supporting Deutsche Börse’s pilot XBRL project with essential technology expertise: Financial reports uploaded to the DB system are saved and managed using our latest Tamino XML Server software. And Software AG has also been tasked with operation of the XBRL portal for the German stock-exchange organization.

This project provides further evidence that our innovative solutions are successfully gaining ground in the marketplace.

For further information on the XBRL initiative and to view quarterly reports in the new format, visit http://xbrl.deutsche-boerse.com/xbrl/index-en.html.