Quarterly Report • Apr 18, 2019
Quarterly Report
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1 Consulting until 2018; realigned for solution implementation in
| Key Developments in the First Quarter | 4 |
|---|---|
| Management's Assessment of First-Quarter Results | 5 |
| Business Line Development | 6 |
| Total Revenue and Earnings Development | 7 |
| Employees | 7 |
| 2019 Outlook | 7 |
| Key Figures | 8 |
| Consolidated Income Statement | 9 |
| Consolidated Balance Sheet | 10 |
| Consolidated Statement of Cash Flows | 12 |
| Segment Report | 13 |
| DBP Segment with Revenue Split | 14 |
| Statement of Comprehensive Income | 15 |
| Safe Harbor Statement | 16 |
Software AG announced on January 31, 2019 its 2018 fourth quarter and fiscal year financial figures as well as its outlook for 2019. The company also released key data regarding its new strategy (Helix), which is geared toward profitable growth. The goal of the refreshed strategy is to accelerate revenue growth while achieving higher recurring revenue and maintaining high profitability. As part of this strategy, Software AG will hone its product portfolio to focus on high-growth segments and expand sales and marketing activities in core markets.
Capital Markets Day: Software AG hosted its Capital Markets Day 2019 on Feb 5, 2019. The event took place in London to position Helix on a broader stage and to specifically cater to the investor base as well as Londonbased financial analysts. Due to London's standing as a financial hotspot, the destination also attracted Frankfurt, Paris and Zürich-based analysts. The event was extremely well received by on-premise attendees, but also by guests worldwide dialing in via webcast.
Partner and Sales Kick-Offs: From February 6 to 7, 2019, Software AG hosted the fifth edition of its partner kick-off in the DACH region in Hamburg, Germany. The event was attended by 55 representatives from 34 partner companies. The partners met with Software AG employees for detailed presentations on the Group's future strategic direction and to coordinate joint projects in the year ahead. One week later, from February 11 to 15, 2019, more than 1,000 Software AG employees gathered in the Spanish capital of Madrid for a global Sales Kick-Off. This year's event focused on the new mission "Freedom as a Service" and development of the Company's business model in the context of the Helix strategy project. After the strategic general session, more than 80 enablement sessions on various topics, from product innovations to customer showcases, were offered.
Software AG ranked a "leader": Software AG was recognized as a "leader" for its webMethods Hybrid Integration Platform in a recent report published by leading independent research firm Forrester Research, Inc. titled, "The Forrester Wave™: Strategic iPaas and Hybrid Integration Platforms, Q1 2019."1 Software AG was also named a "leader" for Alfabet in the report titled, "The Forrester Wave™: Enterprise Architecture Management Suites, Q1 2019."2
Water management solution in Australia: Software AG and Telstra, Australia's largest telecommunications company, partnered to create a solution for digital automated water management. The solution will enable digital interconnectivity between water meters in [x Mio] households not only to measure water consumption but also quickly detect leaks in a utility's distribution system. After the trial, the solution will be offered to other utility companies. Tony Drewitt, Head of IoT (Australia) for Software AG, explained: "Water conservation and management is a top priority for many countries, cities and remote areas and we are excited to be helping create a solution that will address this. In partnership with Telstra, we are trialing a Cumulocity IoT-based solution at Western Australia's Busselton Water. Combining digital meters, dedicated pressure sensors and Telstra's NB-IoT network with our IoT analytics solution, we are able to deliver true water management-as-a-service."
Coca-Cola European Partners chooses Software AG as strategic partner to support digital strategy: Coca-Cola European Partners (CCEP) is the world's largest independent Coca-Cola bottler. CCEP opted for Software AG's hybrid integration platform to implement its technology and business transformation program. CCEP was looking for a single integration platform to meet current and future requirements in alignment with its API-LED architecture and Cloud First strategy. Software AG CEO Sanjay Brahmawar commented, "Total integration is fundamental to successful digitalization." Mark Raphael, Vice President, Business Process and Technology for CCEP, added, "We see use of a holistic integration platform as a way to deliver new capability to our business and support our focus to deliver outstanding customer service."
1 The Forrester Wave™: Strategic iPaaS and Hybrid Integration Platforms, Q1 2019, by Henry Peyret, Gene Leganza, Elizabeth Hoberman, Sara Sjoblom. January 3, 2019.
2 The Forrester Wave™: Enterprise Architecture Management Suites, Q1 2019, by Gordon Barnett, Gene Leganza, Audrey Hecht, Ian McPherson. March 5, 2019.
In the first quarter since the announcement of the Helix transformation strategy, our business delivered strong Group-level performance, slightly ahead of expectations for revenue and comfortably ahead of expectations for EBIT.
We see Group revenue for the first quarter in the amount of €201.4 million, 8 percent higher than Q1 last year. Total product revenue is up 10 percent year-on-year at €154.5 million; and total license revenue is well above the previous year's figure at €42.6 million (Q1 2018: €34.2 million). Q1 Group EBIT was €42.2 million, which is in line with our prior year. Non-IFRS EBITA margin for the quarter came in at 25.6 percent.
Software AG's revenue mix continues to reflect trends seen in Q4 2018, with a higher proportion of revenue than expected in the Adabas & Natural (A&N) segment. Adabas & Natural was the major driver of growth in Q1 with a higher number of key deals leading to better-thanexpected license revenue performance. The work we have done on our Adabas & Natural 2050+ innovation program continues to resonate with customers, enabling them to protect their A&N investments and benefit from everything A&N offers in today's digital age. Adabas & Natural's strong performance was reflected in revenue growth of 22 percent to €54.7 million, an outperformance which led us to raise our 2019 guidance for that segment. We now expect it to deliver –3 to +3 percent revenue growth at constant currency (previously –5 to 0 percent). The guidance ranges for DBP, Cloud & IoT and operating margin (EBITA non-IFRS) remain unchanged.
The Group's Digital Business Platform (DBP, excluding Cloud & IoT) and Cloud & IoT segments performed below expectations in Q1. License sales in DBP excluding Cloud & IoT were down 7 percent year-on-year because certain deal signings slipped beyond the end of the quarter, and the reorganization of the salesforce in North America impacted execution in the period. External factors, including the government shutdown in the U.S., which lasted for 25 days in January, also played their part. Importantly, we do expect a good part of the slipped Q1 deals to close in Q2. The first quarter therefore serves as a confirmatory reminder of why we are right to drive this transition towards a higher-quality, more predictable revenue stream. Following our reorganization and a range of other proactive measures, we expect to see the financial benefits of our Helix strategy come through in the remainder of 2019 and beyond.
DBP (excluding Cloud & IoT) delivered 1 percent year-on-year revenue growth to €90.5 million, while our Cloud & IoT business generated €9.5 million in revenue. This represents a solid increase of 49 percent year-onyear, but is short of the 75 to 125 percent growth rate range we believe we can achieve. While we are not satisfied with this performance, our belief in our growth potential in these segments is undiminished.
Taking a look at DBP and Cloud & IoT together, the slower start is largely due to important and decisive actions we have taken across our business to drive operational change. The later date slowed our Q1 sales momentum somewhat, but it was absolutely the right note on which to start our 2019.
The Management Board's many customer and partner interactions week-to-week give us confidence the market has not stopped moving in our favor. The market continues to see our product offering as best-in-class and aligned with the major market trends driving transformation in our customers' businesses. That winning formula, however, can only continue to be translated into tangible results if we make changes to how we operate. In Q1 we focused on one particularly important initiative, which was a major reorganization of our salesforce in North America. This is the first of many areas we are committed to reshape.
In Q1 we saw slower execution because of these changes. While we are still early in our transformation process, we are already seeing progress. For example, our Q1 performance in EMEA was at a record level. Considering our progress through the lens of customer wins—such as Telstra, Novo Nordisk and Russian Railways—the first quarter of 2019 gave us many exciting proof-points to reflect on.
Our Helix strategy is designed to deliver sustainable, profitable growth in the medium term. In February, we presented details of our strategy and we are making good early progress with implementation: in our product focus, in our operating model, in our hiring efforts and in the ground work we are doing on our subscription shift. It underscores our confidence in the ability of our team to execute and get us to our Helix goals.
We made a similar commitment to focus all our considerable R&D energies on areas best able to deliver growth. During Q1, around 200 highly skilled R&D colleagues have transitioned their focus to "accelerate" product areas. They are clear in the technologies they now aim to develop; and they are each beginning to grow in their new roles.
As we enter Q2, it is clear to us that good progress is being made in these areas and in many others, in line with our timeframes and plan. We look forward to a promising quarter and the remainder of a transformative year for our business to come.
"This quarter has been a significant one for Software AG. We announced our new Helix strategy, implemented key operational changes across our business and delivered strong results at Group level top and bottom line. It is clear that our revenue mix, and particularly the performance in our digital business, is not yet where we want it to be. Therefore, we have implemented operational changes to set us up for longterm growth. The market appetite for our best-in-class products has not diminished. This reaffirms our belief that our Helix strategy is the right one, and we expect to see the benefit of the changes we've made to our go-to-market and execution capability start to come through during the remainder of the year." Sanjay Brahmawar, CEO
"Software AG grew well at Group level during Q1 and continues to generate strong profit while we invest in our business to deliver sustainable long-term growth. In addition, we are fully focused on delivering Helix operational changes to prepare Software AG for its future, leveraging the underlying strength of our financial position." Arnd Zinnhardt, CFO
Software AG's Adabas & Natural (A&N) business had a better- than-expected start to the year, generating revenue of €54.7 million (Q1 2018: €44.8 million) as a result of strong license development driven by a higher number of major deals. The continued strong performance in A&N demonstrates the logic of the Adabas & Natural 2050+ innovation program, which ensures customers can protect their investments and continue benefiting from A&N in the digital age. A&N license sales grew by 98 percent compared to the prior year to total €17.8 million (Q1 2018: €9.0 million). A&N maintenance reached €36.8 million in Q1 2019, up 3 percent year-on-year from €35.7 million in Q1 2018.
Following the announcement of Helix, Software AG's Digital Business Platform (DBP) excluding Cloud & IoT delivered 1 percent year-on-year revenue growth to €90.5 million (Q1 2018: €89.4 million). License sales were down 7 percent at €21.7 million (Q1 2018: €23.4 million). This performance was below the Company's expectations; however, it was caused primarily by a major reorganization of the salesforce in North America.
At €9.5 million (Q1 2018: €6.4 Million), Software AG's Cloud & IoT business posted 49 percent growth in Q1 2019.
Professional Services revenue was €46.7 million (Q1 2018: €46.1 million) in Q1 2019.
In the quarter under review, Software AG recorded €201.4 million (Q1 2018: €186.6 million) in total revenue. Group maintenance revenue reached €107.1 million (Q1 2018: €102.5 million), an increase of 5 percent. Group license revenue in the amount of €42.6 million (Q1 2018: €34.2 million) was 25 percent above the previous year's figure in the quarter under review. The Company's product revenue (licenses + maintenance) totaled €154.5 million (Q1 2018: €140.4 million) in the first quarter.
The Company's earnings before interest and taxes (EBIT) amounted to €42.2 million (Q1 2018: €42.1 million) in the first quarter. The operating EBITA (non-IFRS) reached €51.6 million (Q1 2018: €51.2 million). The respective operating margin (EBITA, non-IFRS) of 25.6 percent (Q1 2018: 27.4 percent) continued at a very high level.
As of March 31, 2019, Software AG had 4,737 (March 31, 2018: 4,610) employees worldwide (full-time equivalents). Of that total, 1,843 (March 31, 2018: 1,938) worked in Consulting and Services, 1,339 (March 31, 2018: 1,197) in Research and Development, 936 (March 31, 2018: 868) in Sales and Marketing and 619 (March 31, 2018: 607) in Administration.
As the business embarks on its long-term strategy to deliver sustainable growth, Software AG remains confident in its outlook for the year and in the Helix strategy. The Company confirms its confidence in its 2019 revenue outlook for Digital Business Platform (excluding Cloud & IoT), Cloud & IoT and operating margin (EBITA, non-IFRS), while raising its 2019 guidance for Adabas & Natural, with the expectation of –3 to +3 percent revenue growth at constant currency (previously –5 to 0 percent).
The table below shows the full forecast for the 2019 fiscal year:
| FY 2018 in € mn |
FY 2019 Outlook as of Jan. 31, 2019 as % |
FY 2019 Outlook as of April 11, 2019 as % |
|
|---|---|---|---|
| DBP revenue | 464.7 | — | — |
| DBP excl. DBP Cloud & IoT | 434.4 | +3 to +71 | +3 to +71 |
| DBP Cloud & IoT | 30.3 | +75 to +1251 | +75 to +1251 |
| A&N revenue | 218.3 | –5 to 01 | –3 to +31 |
| Operating margin (EBITA, non-IFRS)2 |
31.5% | 28.0 to 30.0 | 28.0 to 30.0 |
1 At constant currency
2 Adjusted for non-operating factors (see non-IFRS earnings definition in the 2018 Annual Report on p. 48)
| in € millions (unless otherwise stated) |
Q1 2019 (as stated) |
Q1 2019 (acc1) |
Q1 2018 (as stated) |
+/– as % | +/– as % acc1 |
|---|---|---|---|---|---|
| Revenue | 201.4 | 198.3 | 186.6 | 8 | 6 |
| DBP (incl. Cloud & IoT) | 100.0 | 97.6 | 95.8 | 4 | 2 |
| Thereof DBP (excl. Cloud & IoT) | 90.5 | 88.3 | 89.4 | 1 | –1 |
| Thereof DBP (Cloud & IoT) | 9.5 | 9.3 | 6.4 | 49 | 47 |
| A&N | 54.7 | 54.6 | 44.8 | 22 | 22 |
| Licenses | 42.6 | 42.6 | 34.2 | 25 | 25 |
| Maintenance | 107.1 | 104.7 | 102.5 | 5 | 2 |
| SaaS | 4.9 | 4.7 | 3.8 | 30 | 26 |
| ARR DBP (incl. Cloud & IoT)4 | 308.6 | 276.5 | |||
| Thereof ARR DBP (Cloud & IoT)4 | 36.2 | 18.7 | |||
| Recurring revenue portion DBP (incl. Cloud & IoT) | 85.0% | ||||
| Bookings DBP (incl. Cloud & IoT) | 43.2 | ||||
| Operating EBITA (non-IFRS) | 51.6 | 51.2 | 1 | ||
| as % of revenue | 25.6% | 27.4% | |||
| DBP segment earnings | 17.5 | 26.7 | –35 | ||
| Segment margin | 17.5% | 27.8% | |||
| A&N segment earnings | 39.3 | 31.2 | 26 | ||
| Segment margin | 71.7% | 69.7% | |||
| Net income (non-IFRS) | 36.3 | 36.5 | –1 | ||
| Earnings per share (non-IFRS)2 | 0.49 | 0.49 | –1 | ||
| Operating cash flow | 60.0 | 61.6 | –3 | ||
| CapEx3 | 2.2 | 1.5 | |||
| Repayment of lease liabilities | 3.3 | 0.0 | |||
| Free cash flow | 54.5 | 60.1 | –9 | ||
| Adjusted operational free cash flow | 65.6 | ||||
| as % of revenue | 32.6% | ||||
| Adjusted operational free cash flow per share | 0.89 |
| Balance sheet | Mar. 31, 2019 | Dec. 31, 2018 | ||
|---|---|---|---|---|
| Total assets | 2,036.5 | 2,007.9 | 1 | |
| Cash and cash equivalents | 483.5 | 462.3 | 5 | |
| Net cash | 176.9 | 149.0 | 19 | |
| Employees (FTE) | 4,737 | 4,763 | –1 |
1 acc = At constant currency
2 Based on weighted average shares outstanding (basic) Q1 2019: 74.0 mn/Q1 2018: 74.0 mn
3 Cash flow from investing activities adjusted for acquisitions and investments in debt instruments
4 Annual recurring revenue
Because the figures in this report are stated in accordance with commercial rounding principles, totals and percentages may not always be exact.
| in € thousands | Q1 2019 | Q1 2018 | +/– as % |
|---|---|---|---|
| Licenses | 42,579 | 34,165 | 25 |
| Maintenance | 107,092 | 102,458 | 5 |
| SaaS | 4,866 | 3,750 | 30 |
| Professional Services | 46,707 | 46,061 | 1 |
| Other | 173 | 200 | –14 |
| Total revenue | 201,417 | 186,634 | 8 |
| Cost of sales | –49,459 | –49,507 | 0 |
| Gross profit | 151,958 | 137,127 | 11 |
| Research and development expenses | –33,301 | –28,344 | 17 |
| Sales, marketing and distribution expenses | –60,811 | –52,037 | 17 |
| General and administrative expenses | –17,620 | –17,048 | 3 |
| Other taxes | –1,461 | –1,795 | –19 |
| Operating earnings | 38,765 | 37,903 | 2 |
| Other income/expenses, net | 1,983 | 2,361 | –16 |
| Financing expenses, net | 1,393 | 1,365 | 2 |
| Earnings before income taxes | 42,141 | 41,629 | 1 |
| Income taxes | –12,471 | –11,680 | 7 |
| Net income | 29,670 | 29,949 | –1 |
| Thereof attributable to shareholders of Software AG | 29,567 | 29,912 | –1 |
| Thereof attributable to non-controlling interests | 103 | 37 | |
| Earnings per share (€, basic) | 0.40 | 0.40 | 0 |
| Earnings per share (€, diluted) | 0.40 | 0.40 | 0 |
| Weighted average number of shares outstanding (basic) | 73,979,889 | 73,976,239 | — |
| Weighted average number of shares outstanding (diluted) | 73,981,320 | 73,981,881 | — |
As of March 31, 2019 (IFRS, unaudited)
| in € thousands | Mar. 31, 2019 | Dec. 31, 2018 |
|---|---|---|
| Current assets | ||
| Cash and cash equivalents | 483,531 | 462,362 |
| Other financial assets | 5,969 | 15,302 |
| Trade and other receivables | 180,678 | 207,494 |
| Other non-financial assets | 25,856 | 20,109 |
| Income tax receivables | 17,315 | 19,680 |
| 713,349 | 724,947 | |
| Non-current assets | ||
| Intangible assets | 132,605 | 136,972 |
| Goodwill | 975,919 | 964,377 |
| Property, plant and equipment | 107,779 | 71,023 |
| Other financial assets | 17,959 | 19,563 |
| Trade and other receivables | 65,317 | 68,675 |
| Other non-financial assets | 2,917 | 2,924 |
| Income tax receivables | 10,083 | 9,416 |
| Deferred tax receivables | 10,570 | 10,007 |
| 1,323,149 | 1,282,957 |
| Total Assets | 2,036,498 | 2,007,904 |
|---|---|---|
| Current liabilities Financial liabilities Trade and other payables Other non-financial liabilities Other provisions Income tax liabilities Deferred income Non-current liabilities Financial liabilities Trade and other payables Other non-financial liabilities Other provisions Provisions for pensions and similar obligations Income tax liabilities Deferred tax liabilities Deferred income |
80,133 32,787 95,395 28,178 35,303 168,350 440,146 226,517 |
111,888 38,831 145,839 30,630 37,953 123,276 488,417 201,432 |
|---|---|---|
| 3,221 | 3,245 | |
| 292 | 266 | |
| 6,378 | 10,320 | |
| 34,703 | 34,621 | |
| 2,954 | 2,898 | |
| 11,847 | 11,398 | |
| 16,934 | 16,245 | |
| 302,846 | 280,425 | |
| Equity | ||
| Share capital | 74,000 | 74,000 |
| Capital reserves | 22,612 | 22,612 |
| Retained earnings | 1,230,684 | 1,201,689 |
| Other reserves | –33,472 | –59,138 |
| Treasury shares | –757 | –757 |
| Attributable to shareholders of Software AG 1,293,067 |
1,238,406 | |
| Non-controlling interests | 439 | 656 |
| 1,293,506 | 1,239,062 | |
| Total Equity and Liabilities 2,036,498 |
2,007,904 |
| in € thousands | Q1 2019 | Q1 2018 |
|---|---|---|
| Net income | 29,670 | 29,949 |
| Income taxes | 12,471 | 11,680 |
| Net financial income/expense | –1,394 | –1,365 |
| Amortization/depreciation of non-current assets | 11,588 | 7,990 |
| Other non-cash income/expense | 41 | –1,907 |
| Changes in receivables and other assets | 37,126 | 51,943 |
| Changes in payables and other liabilities | –17,533 | –26,546 |
| Income taxes paid/received | –13,482 | –10,965 |
| Interest paid | –1,382 | –1,811 |
| Interest received | 2,857 | 2,640 |
| Net cash flow from operating activities | 59,962 | 61,608 |
| Proceeds from the sale of property, plant and equipment/intangible assets | 162 | 111 |
| Purchase of property, plant and equipment/intangible assets | –2,444 | –1,852 |
| Proceeds from the sale of non-current financial assets | 171 | 250 |
| Purchase of non-current financial assets | –116 | –6 |
| Proceeds from the sale of current financial assets | 70 | 3 |
| Purchase of current financial assets | –569 | –368 |
| Payments for acquisitions, net | –5,000 | 0 |
| Net cash flow from investing activities | –7,726 | –1,862 |
| Dividends paid | –320 | –263 |
| Payments from changes in other current financial liabilities | –38,241 | –44,558 |
| Repayment of lease liabilities | –3,240 | 0 |
| Proceeds from non-current financial liabilities | 0 | 100,013 |
| Repayment of non-current financial liabilities | 0 | –100,000 |
| Net cash flow from financing activities | –41,801 | –44,808 |
| Change in cash and cash equivalents due to business activities | 10,435 | 14,938 |
| Change in cash and cash equivalents from currency translation | 10,734 | –8,605 |
| Net change in cash and cash equivalents | 21,169 | 6,333 |
| Cash and cash equivalents at beginning of period | 462,362 | 365,815 |
| Cash and cash equivalents at end of period | 483,531 | 372,148 |
| Free cash flow | 54,495 | 60,111 |
For the First Quarter of 2019 (IFRS, unaudited)
| DBP (incl. Cloud & IoT) | A&N | Professional Services1 | Reconciliation | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 2019 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2019 | Q1 2018 | |
| in € thousands | as stated | at constant currency |
as stated | as stated | at constant currency |
as stated | as stated | at constant currency |
as stated | as stated | as stated | as stated | at constant currency |
as stated |
| Licenses | 24,802 | 24,495 | 25,198 | 17,777 | 18,081 | 8,967 | 0 | 0 | 0 | 0 | 0 | 42,579 | 42,576 | 34,165 |
| Maintenance | 70,300 | 68,395 | 66,803 | 36,792 | 36,305 | 35,655 | 0 | 0 | 0 | 0 | 0 | 107,092 | 104,700 | 102,458 |
| SaaS | 4,866 | 4,742 | 3,750 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4,866 | 4,742 | 3,750 |
| Product revenue | 99,968 | 97,632 | 95,751 | 54,569 | 54,386 | 44,622 | 0 | 0 | 0 | 0 | 0 | 154,537 | 152,018 | 140,373 |
| Professional Services | 2 | 2 | 0 | 0 | 0 | 0 | 46,705 | 46,075 | 46,061 | 0 | 0 | 46,707 | 46,077 | 46,061 |
| Other | 0 | 0 | 40 | 173 | 173 | 156 | 0 | 0 | 4 | 0 | 0 | 173 | 173 | 200 |
| Total revenue | 99,970 | 97,634 | 95,791 | 54,742 | 54,559 | 44,778 | 46,705 | 46,075 | 46,065 | 0 | 0 | 201,417 | 198,268 | 186,634 |
| Cost of sales | –9,336 | –9,228 | –8,560 | –2,203 | –2,187 | –1,428 | –35,710 | –35,164 | –37,523 | –2,210 | –1,996 | –49,459 | –49,507 | |
| Gross profit | 90,634 | 88,406 | 87,231 | 52,539 | 52,372 | 43,350 | 10,995 | 10,911 | 8,542 | –2,210 | –1,996 | 151,958 | 137,127 | |
| Sales, marketing and distribution expenses |
–45,790 | –44,739 | –37,770 | –7,365 | –7,367 | –6,614 | –4,270 | –4,211 | –4,382 | –3,386 | –3,271 | –60,811 | –52,037 | |
| Segment contribution | 44,844 | 43,667 | 49,461 | 45,174 | 45,005 | 36,736 | 6,725 | 6,700 | 4,160 | –5,596 | –5,267 | 91,147 | 85,090 | |
| Research and development expenses | –27,385 | –27,214 | –22,807 | –5,916 | –5,962 | –5,537 | 0 | 0 | 0 | 0 | 0 | –33,301 | –28,344 | |
| Segment earnings | 17,459 | 16,453 | 26,654 | 39,258 | 39,043 | 31,199 | 6,725 | 6,700 | 4,160 | –5,596 | –5,267 | 57,846 | 56,746 | |
| General and administrative expenses | –17,620 | –17,048 | ||||||||||||
| Other taxes | –1,461 | –1,795 | ||||||||||||
| Operating earnings | 38,765 | 37,903 | ||||||||||||
| Other income/expense, net | 1,983 | 2,361 | ||||||||||||
| Net financial income/expense | 1,393 | 1,365 | ||||||||||||
| Earnings before income taxes | 42,141 | 41,629 | ||||||||||||
| Income taxes | –12,471 | –11,680 | ||||||||||||
| Net income | 29,670 | 29,949 |
1 Consulting until 2018; realigned for solution implementation in cooperation with customers and partners as of 2019.
| DBP (Cloud & IoT) | DBP (excl. Cloud & IoT) | DBP (incl. Cloud & IoT) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 2019 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2019 | Q1 2018 | Q1 2019 | Q1 2019 | Q1 2018 | ||
| in € thousands | as stated | at constant currency |
as stated | as stated | at constant currency |
as stated | as stated | at constant currency |
as stated | |
| Licenses | 3,059 | 3,041 | 1,787 | 21,743 | 21,454 | 23,411 | 24,802 | 24,495 | 25,198 | |
| Maintenance | 1,576 | 1,553 | 824 | 68,724 | 66,842 | 65,979 | 70,300 | 68,395 | 66,803 | |
| SaaS | 4,866 | 4,742 | 3,750 | 0 | 0 | 0 | 4,866 | 4,742 | 3,750 | |
| Product revenue | 9,501 | 9,336 | 6,361 | 90,467 | 88,296 | 89,390 | 99,968 | 97,632 | 95,751 | |
| Professional Services | 2 | 2 | 0 | 0 | 0 | 0 | 2 | 2 | 0 | |
| Other | 0 | 0 | 0 | 0 | 0 | 40 | 0 | 0 | 40 | |
| Total revenue | 9,503 | 9,338 | 6,361 | 90,467 | 88,296 | 89,430 | 99,970 | 97,634 | 95,791 | |
| Cost of sales | –9,336 | –9,228 | –8,560 | |||||||
| Gross profit | 90,634 | 88,406 | 87,231 | |||||||
| Sales, marketing and distribution expenses | –45,790 | –44,739 | –37,770 | |||||||
| Segment contribution | 44,844 | 43,667 | 49,461 | |||||||
| Research and development expenses | –27,385 | –27,214 | –22,807 | |||||||
| Segment earnings | 17,459 | 16,453 | 26,654 | |||||||
| in € thousands | Q1 2019 | Q1 2018 |
|---|---|---|
| Net income | 29,670 | 29,949 |
| Currency translation differences from foreign operations | 25,807 | –22,682 |
| Net gain/loss on remeasuring financial assets | –8 | –7,900 |
| Currency translation gain/loss from net investments in foreign operations | 747 | –992 |
| Items to be reclassified to the income statement if certain conditions are met | 26,546 | –31,574 |
| Net actuarial gain/loss on pension obligations | –880 | –439 |
| Items not to be reclassified to the income statement | –880 | –439 |
| Other comprehensive income | 25,666 | –32,013 |
| Total comprehensive income | 55,336 | –2,064 |
| Thereof attributable to shareholders of Software AG | 55,233 | –2,101 |
| Thereof attributable to non-controlling interests | 103 | 37 |
This document includes forward-looking statements based on the beliefs of Software AG management. Such statements reflect current views of Software AG with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected here, due to factors including changes in general economic and business conditions, changes in currency exchange, the introduction of competing products, lack of market acceptance of new products, services or technologies and changes in business strategy. Software AG does not intend or assume any obligation to update these forward-looking statements.
This document constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of Software AG or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. This presentation does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities' Act of 1933 in its currently valid form.
Software AG Corporate Communications Uhlandstraße 12 | 64297 Darmstadt | Germany
Tel.+49 6151 92-0 Fax+49 6151 92-1191
[email protected] SoftwareAG.com
MPM Corporate Communication Solutions Mainz, Düsseldorf www.mpm.de
Software AG offers Freedom as a Service. We reimagine integration, spark business transformation and enable fast innovation on the Internet of Things so you can pioneer differentiating business models. We give you the freedom to connect and integrate any technology—from app to edge. We help you free data from silos so it's shareable, usable and powerful—enabling you to make the best decisions and unlock entirely new possibilities for growth.
Software AG has more than 4,700 employees, is active in 70 countries and had revenues of €866 million in 2018.
To learn more about Software AG and Freedom as a Service, visit SoftwareAG.com
Investor Relations 64297 Darmstadt
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