Segment report for the six months ended June 30, 2009
(January 1 to June 30, 2009 and January 1 to June 30, 2008)
|€ thousands||June 30,
|Cost of sales||-41,676||-39,623||-59,024||-55,890||-100,700||-95,513|
|Sales, Marketing & Distribution expenses||-35,763||-33,755||-44,739||-46,125||-80,502||-79,880|
|Business line contribution||114,080||109,466||46,385||43,299||160,465||152,765|
|Research and development expenses||-39,373||-37,324|
|General and administrative expenses||-32,320||-32,089|
|Other operating income / expense, net||1,655||1,151|
|Earnings before interest and taxes||82,346||76,967|
|Net financial income||-255||-2,887|
|Earnings before taxes||82,091||74,080|
Segment report for the three months ended June 30, 2009
(April 1 to June 30, 2009 and April 1 to June 30, 2008)
|Cost of sales||-21,001||-18,927||-29,795||-28,843||-50,796||-47,770|
|Sales, Marketing & Distribution expenses||-17,772||-15,397||-23,567||-24,405||-41,339||-39,802|
|Business line contribution||62,079||57,785||22,163||23,410||84,242||81,195|
|Research and development expenses||-19,201||-18,457|
|General and administrative expenses||-16,258||-16,676|
|Other operating income / expense, net||-412||-1,642|
|Earnings before interest and taxes||44,232||40,936|
|Net financial income/expense||-661||-1,418|
|Earnings before taxes||43,571||39,518|
|in € thousands||June 30, 2009||Dec. 31, 2008||June 30, 2008|
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.
Revenues and pre-tax earnings per quarter were as follows in fiscal 2008:
|in € thousands/in %||Q1 2008||Q2 2008||Q3 2008||Q4 2008||2008|
|in % of annual revenue||22.1||23.4||25.0||29.5||100.0|
|Earnings before taxes||34,562||39,518||47,0907||54,256||175,426|
|in % of net income for the year||19.7||22.5||26.9||30.9||100.0|
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.
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.
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 € thousands||Balance as
of Dec. 31,
of June 30,
as of June
|Stock option program||77,707||0||– 47,935||– 448||29,324||18,077|
|Stock price-based remuneration plan from 2007||1,919,000||199,000||0||– 207,000||1,911,000||0|
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.
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).
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.
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.
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.