Software AG - The XML Company
Deutsch   |   Contact   |   Software AG Homepage
You are here: Home  > Business Development – Overview  > Segment report
  Key Figures
  Letter to Shareholders
  Software AG Stock
Development – Overview
  Group sales
  Group result
  Segment report
  Cash flow
  Product Portfolio Development
  Financial Statements
  Financial Calendar
  Segment report  

Robust leap in earnings in Southern and Western Europe/Latin America
All regions contributed to the increased revenue, but the strongest growth was recorded in the Southern and Western Europe/Latin America region, where revenue rose by 30 percent to €30.6 million. The region’s share in Group sales increased from 23 to 27 percent due to the robust expansion of business.

The licensing business showed very dynamic development in these markets, with revenues doubling from €4.3 million to €8.6 million. The high-margin licensing business stimulated earnings. EBITA increased significantly to €1.6 million (previous year: €0.1 million).

North America/Northern Europe is most profitable region
In the region of North America and Northern Europe, we increased revenue by 10 percent to €56.1 million. With an 18 percent gain to €17.6 million, the licensing business was also the strongest growth driver in this region. Approximately 31 percent of the revenue generated originated from licensing sales. At €17.2 million, EBITA exceeded the comparable value for 2005 by 21 percent. We generated half of the Group-wide total revenue and 80 percent of the Group EBITA in the markets of North America and Northern Europe. This is a ratio that clearly shows the positive effects of the highly profitable product business.

Central and Eastern Europe/Asia
In the Central and Eastern Europe/Asia region, sales rose to €27.3 million (previous year: €26.2 million). In this region, our Professional Services business grew rapidly, gaining 11 percent. At €2.2 million (previous year: €3.4 million), this region’s EBITA in the first quarter fell short of the previous year’s figure. The decline in earnings is due to the weakness of a sales region within Germany. We expect to remedy this as the year proceeds.

  Revenue and earnings trend by region

€ millions




Q1 2006

Q1 2005

Q1 2006

Q1 2005

North America/Northern Europe





Central and Eastern Europe/Asia





Southern and Western Europe/Latin America






Geographic expansion brings clear success
Software AG’s increasing international presence, in particular in fast growing emerging economies, is showing a positive impact on sales. In the countries of Latin America, Eastern Europe and the Middle East/Asia, we increased sales revenue in the first quarter by 59 percent to €14.0 million (previous year: €8.8 million). Accordingly, these emerging markets contributed 12 percent (previous year: 9 percent) to total sales. They contributed more than one-third to the Group’s increase in revenue in the first quarter.

Regarding our established core markets, the United Kingdom reported the largest sales increase including an extraordinary one-off deal: 48 percent to €10.2 million. In North America, the most important regional market with a 25 percent share of Group revenue, sales increased by 11 percent to €28.4 million. Sales in Spain grew by 7 percent to €18.8 million. These growing regions compensated for the weakness of the German market, where sales in the first quarter declined to €13.5 million (previous year: €14.9 million).

Share of Group sales in significant regional markets
  Interim Report Q1/06 (PDF)
Home | Legal Aspects | Privacy Policy | Impressum ©2006 Software AG