Annual Report 2007
5. Financial position
1/3 forward
5.1 Capital expenditure
Capital expenditure for property, plant and equipment normally plays a minor role at Software AG. These investments totaled €5.8 million (excluding additions to the consolidated group) in fiscal year 2007, €0.4 million more than in 2006, and primarily comprised operating and office equipment in the sales branches and at the administrative headquarters in Darmstadt.
Capital expenditure for financial assets rose from €0.3 million to €6.1 million.
We completed two acquisitions in the past fiscal year, significantly increasing our investments in affiliated companies from €0.6 million to €362.3 million. At €321.4 million including ancillary acquisition costs, the largest acquisition was webMethods, Inc. in the United States.
5.2 Consolidated statement of cash flows
In the past fiscal year, Software AG generated free cash flow of €82.2 million (2006: €56.2 million), reflecting an increase of 46 percent. The percentage of free cash flow in total revenues was 13 percent compared to 12 percent in 2006. Free cash flow per share rose by 45 percent from €2.00 to €2.89. Our cash flow performance is therefore sound, the result of the activities implemented in 2007.
Strong operating cash flow
In fiscal 2007, our operating cash flow rose 53 percent to €94 million. The 2006 amount was €61.4 million. This results primarily from the increased net income for the year as well as the increase in impairments relating to the acquisitions.
Cash outflows from investing activities increased from €5.8 million to €374.1 million. This significant increase is the result of the two acquisitions. Cash inflows from financing activities amounted to €179.8 million (2006: cash outflows of €23.7 million). The acquisition of webMethods, Inc. made it necessary to raise bank loans in the amount of €328.4 million, €119.3 million of which was already repaid in fiscal year 2007.
In total, cash and cash equivalents decreased by €103.5 million (2006: increase of €23.2 million), reflecting the cash transactions for the acquisitions. Accordingly, cash and cash equivalents decreased from €184.8 million to €81.3 million.
Consolidated statement of cash flows
| in € million | Q4 2007 | Q4 2006 | 2007 | 2006 |
Change in % |
| Operating cash flow | 47.4 | 23.4 | 94.0 | 61.4 | + 53 |
| CapEx* | - 9.6 | - 1.6 | - 11.8 | - 5.2 | + 127 |
| Free cash flow | 37.8 | 21.8 | 82.2 | 56.2 | + 46 |
| as % of revenue | 20.3 | 16.2 | 13.2 | 11.6 | |
|
Free cash flow per share (in €) |
1.33 | 0.78 | 2.89 | 2.00 | + 45 |
|
Average number of shares (in € million) |
28.5 | 28.1 | 28.4 | 28.1 | + 1 |
* Cash flow from investing activities except acquisitions
