Promising perspectives for 2006
We will continue our geographic
expansion with a focus on Latin America and above all the Middle
East and Japan. In Japan, the exclusive contract with our sales
partner will expire in the fourth quarter of 2006, from which
time onwards we will support our customers directly. This will
enable us to leverage new growth potentials.
We will also continue pursuing our strategy of using acquisitions
as a means of improving our market position. Assuming sustained organic
growth, acquisitions are used for the purpose of enhancing our
technology portfolio or positioning ourselves in the market as a
one-stop solution provider. Acquisitions must therefore accelerate
the growth of Software AG’s core business.
Alliances with partners are also an essential part of our growth
strategy. We will thus continue to build on our successes with other
technology partners such as Fujitsu, IDS Scheer and ILOG and cooperate
with system integrators at project and local levels. The recently
established CentraSite Community will also help spread Software AG’s
For 2006 as a whole, we continue to expect currency-adjusted sales
growth of 10 percent. Licensing revenues will continue to grow at
an above-average rate. For the year as a whole, we anticipate sales
growth between 22 and 25 percent. We had initially projected
growth within a range of 18 and 20 percent. For the maintenance
business, we now expect growth rates between 2 and 4 percent
based on recent developments. Originally, we had forecasted a
flat sales trend for this business segment.
Sales in the professional services segment is expected to grow
between 5 and 8 percent compared to our initial assumption between 12 and 15 percent. Amongst other things, our focus on
strategic projects and the introduction of flexible use of
resources (“resource balancing”) should lead to improving
margins and thus lay the foundation for qualitative growth
in this area.
With regard to our business divisions, the Enterprise Transaction
Systems (ETS) business line is expected to grow by 6 to 8 percent. In
the crossvision business line, all products are now available. We will
also benefit from our highly qualified sales force. Against this backdrop,
we expect revenues from the crossvision business line to increase by 20 to
As for the income, we are raising our guidance for 2006 and now
expect an operating EBIT margin between 22 and 23 percent.