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Press Release

Software AG Returns Significant Growth in First Quarter 2010 with the Addition of Major U.S. Customers

  • U.S. achieved significant double-digit growth of 15 percent in the first quarter
  • Major U.S. customer wins and projects
  • Total revenue up through M&A and organically by 51 percent to €250 million
  • Software AG confirms forecast for fiscal year

Reston, VA, USA, 4/28/2010

Software AG (Frankfurt TecDAX: SOW) is off to a strong start in 2010, continuing on the growth path it began in 2003. First-quarter total revenue was posted at €250.3 million, a 51 percent increase year-on-year. In the same period, product revenue grew 20 percent to €146.7 million. Free cash flow, which had been climbing progressively over the past few quarters, dynamically rose by 39 percent in the first quarter. This higher Free Cash Flow expanded the Company’s capability to further drive growth. The slight upswing in IT demand that became apparent early in the year had a positive impact on the first quarter. The Company expects an increased volume of large-scale projects in the Process Innovation division and confirms its outlook for the fiscal year.

During the first quarter 2010 In the U.S., Software AG gained major new customers and projects in the telecommunications, manufacturing, financial services, retail and insurance industries, as well as in the state and local government illustrating that the demand for IT services is strong as companies seek innovative and cost effective ways to improve their operations.
“The first quarter was indeed triumphant,” said Dean Mericka, President of Sales, Americas, Software AG. “We saw a 15 percent growth that reassured us that companies are focused on aligning how they do business with IT solutions. Now, with the IDS Scheer suite of products, we have a powerhouse of solutions that customers are noticing and taking advantage of. We are already winning joint projects with both ARIS and webMethods products.”

Integration of IDS Scheer and Software AG progressing as planned
Operational integration of IDS Scheer began in February 2010 in the central administrative departments and will continue at the foreign subsidiaries. To further accelerate the process, the merger of the companies is being prepared. To that end, IDS Scheer AG shares will be exchanged for Software AG shares. The exchange rate will be based on a value assessment of the five-year plans of both companies. A preliminary value per share was calculated at €138.96 for a Software AG share and €16.74 per an IDS Scheer share.

Outlook
The operational results showed the normal seasonal effects. In light of the persistently difficult economic climate, this can be considered a very positive indication of upcoming business development. The merger of IDS Scheer and Software AG in both the product and consulting businesses will generate cost benefits and competitive advantages. The Company therefore confirms the outlook for fiscal year 2010 which was published in February, with total revenue growth between 25 and 30 percent and product revenue growth between 12 and 15 percent, at constant currency rates. Accordingly, an increase in net income and earnings per share is expected between 8 and 12 percent.

Key Figures:

in € million

Q1 2010

 

Q1 2009

 

Change

 

 

 

 

Group revenue

250.3

165.3

+51%

- Product revenue

146.7

122.5

+20%

- Licensing revenues

61.2

49.3

+24%

- Maintenance revenues

85.4

73.2

+17%

EBIT

46.6

38.1

+22%

Net income

28.0

25.6

+9%

Earnings per share (in €)

0.98

0.90

+10%

Free cash flow

59.8

43.0

+39%

 

 

 

 

Total employees

5,936

3,640

 

 - Employees in Germany

2,185

851

 

 

About Software AG
With more than 1,000 U.S.-enterprise customers and 800 employees, Software AG's U.S. operation contributes one third of the company's total revenue and is Software AG's largest market presence and R&D location. Software AG has operated nationwide in the U.S. since 1973 through a fully-owned subsidiary, Software AG USA Inc., which is headquartered in Reston, Virginia – also an R&D hub for the company’s core data management and integration technologies. R&D labs for the development of Software AG’s webMethods product suite – offering SOA integration and BPM solutions – include facilities in San José/Silicon Valley, Seattle and Denver. For more information, visit www.softwareag.com/us.

Software AG is the global leader in Business Process Excellence. Our 40 years of innovation include the invention of the first high-performance transactional database, Adabas; the first business process analysis platform, ARIS; and the first B2B server and SOA-based integration platform, webMethods. We are unique in offering the world’s only end-to-end – and easiest to use – business process management (BPM) solutions, with the lowest Total-Cost-of-Ownership. Our industry-leading brands, ARIS, webMethods, Adabas, Natural and IDS Scheer Consulting, represent a unique portfolio for: process strategy, design, integration and control; SOA-based integration and data management; process-driven SAP implementation; and strategic process consulting and services.

Software AG had revenues of 847 million euro (IFRS, unaudited) in 2009 and has around 6,000 employees serving 10,000 enterprise and public institution customers across 70 countries. Our comprehensive software and services solutions allow companies to continuously achieve their business results faster. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW).

About IDS Scheer
IDS Scheer is part of the Software AG Group and a leading provider of Business Process Management (BPM) software, solutions and services for corporations and public organizations worldwide. With the ARIS Platform for Process Excellence, the company offers an integrated, comprehensive solution portfolio for the strategy, design, implementation and controlling of business processes; allowing companies to continuously improve their overall business performance. Utilizing the ARIS Value Engineering (AVE) approach, IDS Scheer consultants bridge the gap between corporate strategy, business processes, IT solutions and process controlling.

Software AG – Get There Faster
Software AG | Uhlandstraße 12 | 64297 Darmstadt | Germany

Contact:
Software AG
Cheryl Hawkins
Senior Manager, Public Relations
11700 Plaza America Drive, Suite 700
Reston, Virginia 20190
United States
Tel: +1 703 391-6627
Fax: +1 703 390-7401
cheryl.hawkins@softwareag.com
http://www.softwareag.com/us
or:
Software AG
Norbert Eder
Vice President Corporate Communications
Uhlandstrasse 12
64297 Darmstadt
Germany
Tel: +49 6151 92-1146
Fax: +49 6151 92-1623
norbert.eder@softwareag.com
http://www.softwareag.com