AD HOC DISCLOSURE ACCORDING TO § 15 WPHG

Full year outlook confirmed despite weaker growth in Q2

Darmstadt July 13, 2011 - Software AG, Darmstadt (Frankfurt TecDAX: SOW) achieved total revenues of approx. €256–258 (2010: 267.3) million in the second quarter of the current fiscal year, based on an initial consolidation of financial figures. Total revenue at constant currency held steady at the previous year’s level. Less-favorable foreign currency translations had a significant impact on stated revenues in comparison to the corresponding period in 2010 (approx. - €10 million). License sales continue to exhibit the weakness in Europe seen in first quarter 2011, and a number of planned licensing agreements in both product lines (ETS und BPE) failed to close in June. BPE project services posted double-digit growth in the second quarter, whereas demand for implementation of SAP products remained below the previous year’s level. For the second quarter of fiscal 2011, the company now expects to report services revenue of approx. €105–106 (2010: 105.4) million and product revenue of approx. €151–152 (2010: 161.9) million, of which licensing revenue will account for €57–58 (2010: 68.8) million.

Nevertheless, Software AG expects to increase its EBIT margin for the second quarter to a level of 22.5–23.0% (2010: 22.0%) because of improved cost ratios compared to the previous year. The stated EBIT (IFRS) for Q2 2011 will roughly match the previous year’s result of €58.9 million.

The sales pipeline remains strong and can make up for the lower licensing revenues of Q2 2011 based on expected license deals and consulting projects slated for the second half of fiscal 2011. In addition, management is poised to take action to overcome operating weaknesses identified in Europe.

On this basis, the company affirms the forecast for the full year 2011 that was published in January, which predicted revenue growth of 5–7%, at constant currency, and a jump in net income of 10–15%.

Full and finalized figures will be published on July 28, 2011. 
 

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