Northern Europe/North America registers the strongest sales

The Northern Europe/North America region, which includes the U.S., Canada, the UK, Scandinavia, France, Italy and South Africa, achieved the highest sales for Software AG. Over 47 percent of our total sales were generated from this market during 2006. Sales revenues in the Northern Europe/North America region increased by 11.6 percent to €231.5 million (prior year: €207.4 million). Sales grew by 13 percent on a currency-adjusted basis. License revenues for this region rose 38.4 percent to €87.7 million in 2006. Revenues from Professional Services decreased moderately by 4.7 percent to €34.5 million.

USA/Canada remained our primary market with a share of 26 percent of total sales, as in the previous year. Sales in this market grew by 13 percent, from €113.0 million to €127.6 million. The growth in sales stemmed from the strong licensing business in both business lines. In the U.S., rising licensing revenues more than offset the weaker Professional Services business brought about by the reorganization.

In the UK, we achieved an enormous leap in sales of 29 percent to €37.0 million. This made the UK the strongest growth market in the region.

Southern and Western Europe/Latin America registers double-digit growth in the Professional Services business

The Southern and Western Europe region, which also includes activities in Latin America, drove sales up by 7 percent to €125.3 million (prior year: €117.1 million). No net foreign exchange impact was experienced on sales in this region. Maintenance revenues were slightly higher at €27.3 million. Revenues from Professional Services, however, increased significantly by 11.7 percent to €63.1 million.

Spain is our second largest market with a share of 17 percent of total sales (prior year: 18 percent). Revenues in Spain increased by 7 percent, from €77.8 million to €83.6 million. Spain showed steady growth with a high share of Professional Services revenues (62 percent).

Central and Eastern Europe/Asia shows strong sales increase in licensing business

Sales revenues increased to €127.8 million in the Central and Eastern Europe/Asia region (prior year: €115.0 million). Currency- adjusted sales grew by 11 percent. The licensing business expanded in particular with sales up by 29.2 percent to €45.1 million.

In Germany, the rise in product sales of 20 percent was able to partially offset the reduction in Professional Services sales of 9 percent. Germany contributed 14 percent to total sales (prior year: 15 percent), with sales growth of 4 percent from €66.7 million to €69.7 million.

The new markets in the various regions also contributed to our growth: Latin America, the Middle East, Eastern Europe, Asia and Australia now have a 12 percent share in total revenue. These growth markets generated revenues of €57.5 million in 2006, representing an increase of 21 percent over the previous year.