Software AG will continue on growth course

Software AG is aiming for an increase in currency-adjusted Group sales of approximately 10 percent in fiscal 2007. We also expect the EBIT ratio to improve by approximately 1 percentage point to 24 percent, headed toward the medium-term goal of 25 percent. This prediction highlights Software AG’s profitable growth course.

For 2007, Software AG anticipates that the ETS business line will achieve currency-adjusted growth of 5 to 7 percent and the Crossvision business line an increase of 20 to 30 percent.

We expect an even greater rise in net earnings of 12 to 19 percent. This results in prognosis for earnings per share of €2.90 to €3.10.

Increased presence in Japan and Brazil

We will focus both on organic growth and acquisitions in expanding our business during 2007. Emphasis will also be placed on Japan and, starting in 2008, Brazil. Both of these markets have been serviced by distributors for many years. Since October of 2006, Software AG has conducted its own operations in Japan and is directly active in the market. We have a strong established customer base in Japan consisting of some 200 enterprises, primarily in the area of ETS. We plan to increase business with this customer base and to expand introduction of our Crossvision products in the medium term. We anticipate annual revenue potential of approximately €10 to €15 million in Japan, and expect the EBIT ratio here to reach Group levels. In Brazil, we estimate a possible business volume of €50 to €100 million dollars per year in the long term. We are currently preparing to enter this market and will begin direct distribution of our products in 2008.

Proactive M&A strategy

Software AG will pursue a proactive M&A strategy in 2007/2008 with acquisitions being scheduled for 2007. These acquisitions serve to extend market presence, enhance the Groups technology leadership and gain additional market share. The Company has at its disposal up to €700 million in own and foreign funds. Software AG intends to be a driving force in the consolidation of the fragmented market for Integration IT. The key criterion for each acquisition will be the potential of the company to add to the Groups earnings per share.

The licensing business will also increase sharply

In 2007, we anticipate currency-adjusted growth of between 20 and 25 percent from our licensing business. We are anticipating stable sales from our maintenance and Professional Services businesses; sales from both lines are expected to be 3 to 5 percent higher than in the year under review in accordance with the current outlook.

Both business lines on a growth course: stable growth for ETS and high rates of increase for the legacy modernization and Crossvision integration businesses show that we are ready for the future

Our competence in integrating systems and applications based on Service-Oriented Architecture provides the foundation for this optimistic assessment. The SOA Suite Crossvision is currently the top product offering in the SOA area and affords Software AG a competitive head start in this rapidly growing market. We expect to succeed in exploiting market opportunities and continuing to expand our business with integration solutions on this basis. In order to effectively utilize our potential, we aim to enter into partnerships with other companies in the integration business in the future. We expect sales to remain stable at the current high level for the ETS products for operating and modernizing mainframes. This business line is benefiting from a mainframe renaissance brought about by the high demand for database capacity increases, which should continue over the next few years.

Continued attractive dividend policy

We plan to maintain our dividend policy in the future as well and to pay out 40 percent of the average of net income and free cash flow for each share.