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[Note: All figures are provisional and rounded and may possibly still change. All percentages in the text are at constant currency.]
Darmstadt, Germany, 7/15/2014
After an initial consolidation, Software AG (Frankfurt TecDAX: SOW) announced preliminary financial results for the second quarter of 2014. While sales in the ETS business developed as expected, the BPE business line was marked by a surprising reluctance by customers to commit to major infrastructure projects. Accordingly the annual forecast has been adjusted..
The Business Process Excellence (BPE) division had revenues of €85 million (previous year: €91.4 million) in the second quarter. License revenue with €33 million (previous year: €42.8 million) was under the previous year’s level. Maintenance revenue, however, rose in the second quarter to €52 million (previous year: €48.6 million), an operating growth by 11 percent.
The traditional database business Enterprise Transaction Systems (ETS) was in line with expectations, with sales of €56 million (previous year: €75.8 million). License revenue amounted to €17 million (previous year: €32.6 million). ETS maintenance revenue was around €38 million euros (previous year: €43.1 million).
The Consulting division reported revenues of around €56 million (previous year: €70.5 million). The main reason was the deconsolidation of the SAP service activities. After the sale of the business focused on third-party solutions, Software AG will concentrate exclusively on the development, distribution and service of its own products.
The operating profit (non-IFRS) decreased in the second quarter to €45 million (previous year: €58.7 million); this corresponds to an operating margin of 23 percent. The reported EBIT (IFRS) was impacted by one-off effects from the deconsolidation of the SAP consulting business and is approximately €25 million (previous year: €44.4 million).
Due to the significant delays in major projects in the second quarter, the Group now expects full year 2014 BPE revenue to remain approximately at the previous year’s level. Revenue forecast in the traditional database business ETS remains unchanged at a reduction of 16 percent to 9 percent (net of currency effects). The company expects an operating margin (non-IFRS) of 26-28 percent for the full year 2014 (previous year: 26.8 percent).
Software AG will give further details in a conference call on July 15, 2014 at 09:00 clock CET. Dial-in details are as follows: Germany +49 (0) 69 566 036 000 | UK +44 (0) 203 059 5869 | USA +1 (1) 631 302 6547. The company will publish its full quarterly results on 24 July 2014.
About Software AG
Software AG (Frankfurt TecDAX: SOW) helps organizations achieve their business objectives faster. The company's big data, integration and business process technologies enable customers to drive operational efficiency, modernize their systems and optimize processes for smarter decisions and better service. Building on over 40 years of customer-centric innovation, the company is ranked as a "leader" in fifteen market categories, fueled by core product families Adabas and Natural, ARIS, Terracotta, webMethods, Alfabet and Apama. Software AG has more than 4,600 employees in 70 countries and had revenues of 973 million in 2013. Learn more at www.softwareag.com
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