AD HOC DISCLOSURE ACCORDING TO § 15 WPHG
Software AG: Weak sales in the US leads to drop in revenue in the fourth quarter of 2011 (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, January 10, 2011 - 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 U.S., so that the total revenue of the division of €145 to €148 million remained at the 2010 level, at constant currency rates.
The usual seasonal boost (budget flush) 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 further under last year's fourth quarter high value than planned, a quarter also characterized by exceptionally large contracts.
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).
in € million | Q4 2011 prel. | Q4 2010 | Δ % | Δ % acc |
BPE Product Revenue | 97 to 100 | 100.2 | 0% to -3% | -1% to -2% |
83 to 85 | 115.9 | -27% to -28% | -26% to -27% | |
Total Revenue | 290 to 295 | 326.7 | -10% to -11% | -8% to -10% |
Net Income | 45 to 50 | 64.7 | -23% to -30% | n/a |
Software AG will give further details in a telephone conference call on 10th January 2012, at 11:00 CET.
Software AG will publish its full earnings on January 24th, 2012.
| Contact: Otmar Winzig Senior Vice President Investor Relations & Compliance Mobile: +49 170 455 1562 Fax: +49 6151- 92-34 1669 investor.relations@softwareag.com | |
