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Other disclosures

7_Segment reporting

Segment report for the six months ended June 30, 2009
(January 1 to June 30, 2009 and January 1 to June 30, 2008)
IFRS, unaudited


ETSwebMethodsTotal
€ thousandsJune 30,
2009
June 30,
2008
June 30,
2009
June 30,
2008
June 30,
2009
June 30,
2008
Licenses63,79767,94945,32548,798109,122116,747
Maintenance93,08377,63253,97543,504147,058121,136
Product revenue156,880145,58199,30092,302256,180237,883
Professional services34,21636,20449,77852,49683,99488,700
Other4231,0591,0705161,4931,575
Total revenue191,519182,844150,148145,314341,667328,158
Cost of sales-41,676-39,623-59,024-55,890-100,700-95,513
Gross profit149,843143,22191,12489,424240,967232,645
Sales, Marketing & Distribution expenses-35,763-33,755-44,739-46,125-80,502-79,880
Business line contribution114,080109,46646,38543,299160,465152,765
Research and development expenses



-39,373-37,324
General and administrative expenses



-32,320-32,089
Other operating income / expense, net



1,6551,151
EBITA



90,42784,503
Amortization



-8,081-7,536
Earnings before interest and taxes



82,34676,967
Net financial income



-255-2,887
Earnings before taxes



82,09174,080
Taxes



-27,512-24,433
Net income



54,57949,647

 

Segment report for the three months ended June 30, 2009
(April 1 to June 30, 2009 and April 1 to June 30, 2008)
IFRS, unaudited


ETSwebMethodsTotal
€ thousandsQ2|2009Q2|2008Q2|2009Q2|2008Q2|2009Q2|2008
Licenses37,26034,74822,59126,60459,85161,352
Maintenance46,73339,29027,12222,49073,85561,780
Product revenue83,99374,03849,71349,094133,706123,132
Professional services16,69817,26124,99227,52041,69044,781
Other16181082044981854
Total revenue100,85292,10975,52576,658176,377168,767
Cost of sales-21,001-18,927-29,795-28,843-50,796-47,770
Gross profit79,85173,18245,73047,815125,581120,997
Sales, Marketing & Distribution expenses-17,772-15,397-23,567-24,405-41,339-39,802
Business line contribution62,07957,78522,16323,41084,24281,195
Research and development expenses



-19,201-18,457
General and administrative expenses



-16,258-16,676
Other operating income / expense, net



-412-1,642
EBITA



48,37144,420
Amortization



-4,139-3,484
Earnings before interest and taxes



44,23240,936
Net financial income/expense



-661-1,418
Earnings before taxes



43,57139,518
Taxes



-14,641-12,409
Net income



28,93027,109

 

8_Contingent liabilities

in € thousandsJune 30, 2009Dec. 31, 2008June 30, 2008
Guarantees1,2231,3111,311
Other1,5941,2521,426
 2,8172,5632,737

 

The carrying amount of collateral received amounted to €521 thousand (Q2 2008: €521 thousand).

Other financial commitments

The Company has entered into rent and lease agreements for buildings, land, computer and telephone equipment, and vehicles. The obligations under these agreements for their remaining non-cancelable terms up until the end of fiscal 2009 amount to €6,276 thousand (Q2 2008: €6,006 thousand). Obligations of €35,509 thousand exist for the period up until the end of fiscal year 2014 (Q2 2008: a total of €40,650 thousand until the end of fiscal 2013), and obligations of €8,934 thousand for the period after fiscal 2014 (Q2 2008: a total of €5,943 thousand for the period after fiscal 2013). The lease agreements are operating leases as defined in IAS 17.

9_ Seasonal influences

Revenues and pre-tax earnings per quarter were as follows in fiscal 2008:

in € thousands/in %Q1 2008Q2 2008Q3 2008Q4 20082008
Total revenue159,391168,767180,047212,405720,610
in % of annual revenue22.123.425.029.5100.0
Earnings before taxes34,56239,51847,090754,256175,426
in % of net income for the year19.722.526.930.9100.0

 

Revenues and earnings before taxes for the third and fourth quarters were positively influenced by the expansion of our business in Brazil. For this reason, the quarterly breakdown of revenues and earnings before taxes is only of limited informational value.

10_ Litigation

In connection with the lawsuit by a small Canadian software company, court-ordered mediation talks were held which led to a settlement and resolution of the lawsuit.

There were no other changes with respect to the legal disputes reported at the end of 2008, nor were there any new legal disputes that could potentially have a significant effect on the Company’s financial position, financial performance, or cash flows.

11_ Stock option plans and stock appreciation rights program

Software AG has two different stock option plans for members of the Executive Board, upper management, and Group employees. Our sharebased compensation programs are described in detail on pages 103 – 106 of our 2008 Annual Report.

The expense for stock options that were accounted for in accordance with IFRS 2 as equity-settled stock option programs in the second quarter of 2009 amounted to €240 thousand (Q2 2008: €571 thousand).

The expense for stock options that were accounted for as cash-settled stock option programs in the second quarter of 2009 in accordance with IFRS 2 amounted to €-970 thousand (Q2 2008: €1,810 thousand).

The number of outstanding stock options has changed as follows since Dec. 31, 2008:

in € thousandsBalance as
of Dec. 31,
2008
GrantedExercisedForfeitedBalance as
of June 30,
2009
Thereof
exercisable
as of June
30, 2009
Stock option program77,7070– 47,935– 44829,32418,077
Stock price-based remuneration plan from 20071,919,000199,0000– 207,0001,911,0000

 

Of the options outstanding on June 30, 2009 from the 2007 stock price-based remuneration program, 1,100,000 options were accounted for as cash-settled stock option programs in accordance with the provisions of IFRS 2.

12_ Employees

As of June 30, 2009, the effective number of employees (i.e., part-time employees are taken into account on a pro-rata basis only) amounted to 3,603 ( June 30, 2008: 3,427), 76 percent of whom were employed abroad ( June 30, 2008: 78 percent). In absolute terms (i.e., part-time employees are taken fully into account), the Group employed 3,684 people ( June 30, 2008: 3,501) at the end of the second quarter ( June 30, 2009).

13_Changes and information regarding corporate bodies

Supervisory Board

Frank F. Beelitz, who had been a member of the Supervisory Board since January 1, 2000, stepped down from his position as Chairman and member of the Board as of the end of the Annual Shareholders’ Meeting held on April 30, 2009. Heinz Otto Geidt, who resides in Kelkheim, Germany and is Director of Asset Management at the Software AG Foundation, was elected to the Supervisory Board as a new member by the Annual Shareholders’ Meeting on April 30, 2009. On April 30, 2009, Dr. Ing. Andreas Bereczky, the former Deputy Chairman, was elected Chairman, and Alf Henryk Wulf was elected Deputy Chairman by the members of the Supervisory Board.

Executive Board

Holger Friedrich left the Company on March 13, 2009. As of March 13, 2009, Ivo Totev was appointed a member of the Executive Board and took over global responsibility for Global Consulting Services.

14_ Events after the balance sheet date

Except for the events mentioned in Note 4 (Business Acquisitions), no significant events occurred between the balance sheet date and the date of release of these interim financial statements.

Date of release of the interim financial statements

Software AG ‘s Executive Board approved the consolidated interim financial statements on August 10, 2009.