Software AG: Weak sales in the Americas leads to a drop in revenue in the fourth quarter of 2011, despite strong growth in Europe

• Full-year revenue remains stable
• Business Process Excellence (BPE) division: strong growth in Europe offset lower revenue in the U.S.
• Enterprise Transactions Systems (ETS) division: overall customer reluctance to invest dampened efforts to offset the expected structural reduction of sales in Brazil
• Q4 total revenue was about 8 to 10 percent below 2010 (at constant currency rates)
• Profit after tax in the region of €45 to €50 million for the quarter is expected

Darmstadt, Germany, 1/10/2012

Software AG (Frankfurt TecDAX: SOW), after an initial consolidation of the revenue and earnings estimates of the subsidiaries for the fourth quarter 2011, announced total revenues of approximately €290 to €295 million (previous year €326.7 million). At constant currency rates, total fourth quarter revenue was about 8 to 10 percent below the previous year’s figure and fourth quarter license revenue of about €90 to €95 million (previous year €127.7), about 25 to 27 percent below.

In the fourth quarter, the growth segment BPE (innovative software for process integration and automation) license revenue, in both DACH and in the EMEA region increased by about 40 percent. This success was offset by a significant decline in the Americas, so that the total revenue of the division of €145 to €148 million remained at the 2010 level, at constant currency rates.

“We are confident that our BPE strategy will be successful also in the Americas and that BPE remains the significant growth driver for Software AG”, said Karl-Heinz Streibich, CEO at Software AG. “We returned more than 30 percent BPE license growth for the year in the DACH region and are taking steps to match this outstanding performance on a global basis. The strong license growth in DACH and EMEA – well above market growth – is clear proof of our strategy.”

The usual seasonal boost in ETS sales in the fourth quarter did not materialize. Presumably, the predicted economic slowdown meant that customers residual budget, in contrast to normal years, was not invested in capacity expansion. Therefore, the stable ETS revenues in Europe and the increased ETS revenues in the U.S. did not fully compensate for the expected structural effects on sales in Brazil (the transfer of local customers to the direct sale model was completed in 2010). As a result, total ETS revenue in the fourth quarter of about €100 to €103 million (previous year €133.2 million) did not match the stable development of the first nine months. ETS product revenue of €83 to €85 million (previous year €115.9) was below last year's fourth quarter, a quarter characterized by exceptionally large contracts.

“The ETS business division will continue to provide sustainable profit and cash flow making an important contribution to company development”, said Software AG CFO Arnd Zinnhardt at today’s Financial Analyst call. “I would also like to point out that, despite the fourth quarter results, both revenue and earnings have maintained the levels of 2010 which marked historic record results for the Group.”
The lower license revenues are not fully reflected in Group earnings due to the established company revenue-related compensation schemes. Software AG therefore expects profit after tax of €45 to €50 million for the fourth quarter.

For the full year 2011, Software AG achieved a turnover of nearly €1.1 billion, the same level as 2010, at constant currency rates. BPE product revenue (licenses and maintenance) grew by 6 to 7 percent while the ETS division reported a decline of 9 to 10 percent.

The full-year 2011 profit after tax is expected to be around the same level as the previous year (€175.6 million).

Software AG will publish its full earnings on January 24th, 2012.

About Software AG
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 offer our customers end-to-end business process management (BPM) solutions delivering low Total-Cost-of-Ownership and high ease of use. Our industry-leading brands, ARIS, webMethods, Adabas, Natural, CentraSite and IDS Scheer Consulting, represent a unique portfolio encompassing: 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 €1.1 billion in 2010 and has more than 5,400 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).

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Contact: Software AG Paul Hughes Director Media Relations Uhlandstrasse 12 64297 Darmstadt Germany Tel: +49 6151 92-1787 Fax: +49 6151 92-1623 press@softwareag.com http://www.softwareag.com

or: Software AG Bärbel Strothmann-Schmitt Senior Manager, Public Relations Uhlandstrasse 12 64297 Darmstadt Germany Tel: +49 6151 92-1502 Fax: +49 6151 92-1623 press@softwareag.com http://www.softwareag.com