PSI Software SE

Earnings Release • May 26, 2010

Smart solutions for the fittest

Report on the 1st Quarter of 2010

	01/01-31/03/10 in KEUR	01/01-31/03/09 in KEUR	Change in KEUR	Change in %
Revenues	37,133	30,575	+6,558	+21.4
Operating Result	1,754	1,712	+42	+2.5
Result before income taxes	1,362	1,399	–37	–2.6
Net result	1,154	1,293	–139	–10.8
Cash and cash equivalents	19,602	27,031	–7,429	–27.5
Employees on 31 March	1,398	1,132	+266	+23.5
Revenue/Employee	26.6	27.0	–0.4	–1.5

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Interim Management Report

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PSI Group has increased its earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first quarter of 2010 by 16 % to 2.8 million Euros (31 March 2009: 2.4 million Euros) and its earnings before interest and taxes (EBIT) by 3 % to 1.8 million Euros (31 March 2009: 1.7 million Euros). Consolidated earnings after interest and taxes dropped slightly to 1.2 million Euros (31 March 2009: 1.3 million Euros), while consolidated sales rose by 21 % to 37.1 million Euros (31 March 2009: 30.6 million Euros). Incoming orders were up 7 % compared to the same period last year at 45 million Euros (31 March 2009: 42 million Euros), the order backlog dropped to 105 million Euros (31 March 2009: 112 million Euros).

The Energy Management segment (electricity, gas, oil, heat) achieved 14 % higher sales of 15.5 million Euros (31 March 2009: 13.6 million Euros). The segment's operating result was further increased to 1.5 million Euros (31 March 2009: 0.9 million Euros). Key domestic and export projects were accepted and carried out in this segment. Following a limited number of order placements in the previous year, PSI recorded an increase in demand for intelligent network management solutions and expects further major orders in the coming quarters.

At 15.5 million Euros, sales in the Production Management segment (raw materials, industry, logistics) were up 7 % on the year (31 March 2009: 14.5 million Euros). The operating result dropped to 0.2 million Euros (31 March 2009: 0.7 million Euros), falling considerably short of expectations. The performance of the logistics subsidiary and non-recurrent expenditure in this business had a particularly negative effect on the segment. Once again, positive developments were recorded in the PSI Metals division, in which all activities are continuing to be pooled under one roof.

In Infrastructure Management (traffic, safety, telecommunications), which the inControl Tech Group became a part of in 2009, sales more than doubled to 6.1 million Euros (31 March 2009: 2.4 million Euros). The operating result increased to 0.3 million Euros (31 March 2009: 0.2 million Euros). This includes further investments in the newly founded Cellls GmbH in the first half of 2010. The seasonal nature of Infrastructure Management was further emphasised by inControl Tech Group. In the coming quarters, PSI expects demand for infrastructure solutions and traffic systems to increase, especially in South East Asia.

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Cash-flow from operations was slightly negative at –0.8 million Euros (31 March 2009: 3.8 million Euros) so that liquidity decreased to 19.6 million Euros (31 March 2009: 27.0 million Euros).

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Compared to 31 December 2009, there have not been any material changes in the Group's assets.

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The number of employees grew to 1,398 on 31 March 2010 (31 March 2009: 1,132) as a result of the acquisitions in the previous year and specific new hires.

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The PSI stock ended the 1st quarter 2010 with a final price of 9.71 Euros, 9.7 % above the final 2009 price of 8.85 Euros. In the same period, the DAXsector Software Index, which includes all the software stocks in the Prime Standard of the German Stock Exchange, had an increase of 8.7 %.

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The estimate of the corporate risk has not changed since the Annual Report for 31 December 2009.

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Over the past few months, PSI has observed a renewed increase in demand for energy market solutions and increasing efficiency in heavy industry. Management is expecting further growth drivers, especially in the Gulf region as well as Germany and Europe, as a result of creating European super grids and intelligent energy consumption control using smart grids.

PSI is confirming its annual targets for 2010 of 160 million Euros in sales and an operating result of 10 million Euros.

Group Balance Sheet

from 1 January 2010 until 31 March 2010 according to IFRS

MNLMNJPNLMPLNM hbro 9,504 48,097	MNLMNJPNLNOLMV= hbro= 9,344
	48,585
383	359
2,897	2,904
SMIUUN	SNINVO=
3,245	2,837
26,922	33,751
40,472	32,686
4,535	3,504
19,602	20,765
VQITTS	VPIRQP=
	NRQITPR=
	NRRISRT

qçí~ä=bèìáíó=~åÇ=iá~ÄáäáíáÉë=

bèìáíó=
Subscribed capital	40,185	40,185
Capital reserves	35,148	35,244
Other reserves	–1,158	-1,589
Accumulated losses	–6,397	–7,551
	STITTU	SSIOUV=
kçåJÅìêêÉåí=äá~ÄáäáíáÉë=
Long-term debt	843	843
Pension provisions	30,260	30,096
Deferred tax liabilities	2,325	2,314
	PPIQOU	PPIORP=
`ìêêÉåí=äá~ÄáäáíáÉë=
Trade payables	13,092	14,610
Other current liabilities	25,562	23,147
Liabilities from long-tem development contracts	13,330	15,398
Short-term debt	1,979	1,561
Provisions	488	477
	RQIQRN	RRINVP=
qçí~ä=Éèìáíó=~åÇ=äá~ÄáäáíáÉë=	NRRISRT	NRQITPR=

Group Income Statement

from 1 January 2010 until 31 March 2010 according to IFRS

	P=jçåíÜ=oÉéçêí MNLMNJPNLMPLNM hbro	P=jçåíÜ=oÉéçêí= MNLMNJPNLMPLMV= hbro=
Sales revenues	37,133	30,575
Other operating income	1,475	1,693
Changes in inventories of work in progress	7	60
Cost of materials	–5,763	–3,490
Personnel expenses	–23,215	–20,357
Depreciation and amortization	–1,019	–669
Other operating expenses	–6,864	–6,100
léÉê~íáåÖ=êÉëìäí	NITRQ	NITNO=
Interest income	18	89
Interest expenses	-434	-402
Result from equity investments	24	0
oÉëìäí=ÄÉÑçêÉ=áåÅçãÉ=í~ñÉë=	NIPSO	NIPVV=
Income tax	–208	–106
kÉí=êÉëìäí=	NINRQ	NIOVP=
Earnings per share (in Euro per share, basic)	0.07	0.11
Earnings per share (in Euro per share, diluted)	0.07	0.11
Weighted average shares outstanding (basic)	15,697,366	11,900,000
Weighted average shares outstanding (diluted)	15,697,366	11,900,000

Group comprehensive Income Statement

from 1 January 2010 until 31 March 2010 according to IFRS

	P=jçåíÜ=oÉéçêí MNLMNJPNLMPLNM hbro	P=jçåíÜ=oÉéçêí= MNLMNJPNLMPLMV= hbro=
kÉí=êÉëìäí=	NINRQ	NIOVP=
Currency translation	431	–96
dêçìé=ÅçãéêÉÜÉåëáîÉ=êÉëìäí=	NIRUR	NINVT=

Group Cash Flow Statement

from 1 January 2010 until 31 March 2010 according to IFRS

	P=jçåíÜ=oÉéçêí MNLMNJPNLMPLNM	P=jçåíÜ=oÉéçêí= MNLMNJPNLMPLMV=
	hbro	hbro=
^pecilt=colj=lmbo^qfkd=^qfsfqfbp=
oÉëìäí=ÄÉÑçêÉ=áåÅçãÉ=í~ñÉë=	NIPSO	NIPVV=
^ÇàìëíãÉåíë=Ñçê=åçåJÅ~ëÜ=ÉñéÉåëÉë=
Amortization on intangible assets	542	260
Depreciation of property, plant and equipment	477	409
Interest income	–18	–89
Interest expenses	434	402
Other income/expense without cash effect	408	–96
	PIOMR	OIOUR=
`Ü~åÖÉë=çÑ=ïçêâáåÖ=Å~éáí~ä=
Inventories	–408	–58
Trade receivables	–957	1,300
Other current assets	–1,324	–1,642
Provisions	–329	–301
Trade payables	–1,518	584
Other current liabilities	348	1,721
	ÓQINUU	NISMQ=
Interest paid	–39	–3
Income taxes paid	252	–81
`~ëÜ=Ñäçï=Ñêçã=çéÉê~íáåÖ=~ÅíáîáíáÉë=	ÓTTM	PIUMR=
^pecilt=colj=fksbpqfkd=^qfsfqfbp=
Additions to intangible assets	–55	–69
Additions to property, plant and equipment	–637	–438
Additions to associated companies	0	–79
Additions to investments in subsidiaries	–137	0
Interest received	18	89
`~ëÜ=Ñäçï=Ñêçã=áåîÉëíáåÖ=~ÅíáîáíáÉë=	ÓUNN	ÓQVT=
^pecilt=colj=cfk^kfkd=^`qfsfqfbp=
Proceeds/repayments from/of borrowings	418	74
Acquisition of treasury stocks	0	-1
`~ëÜ=Ñäçï=Ñêçã=Ñáå~åÅáåÖ=~ÅíáîáíáÉë=	QNU	TP=
^pe=^ka=^pe=bnrfs^ibkqp= ^q=qeb=bka=lc=qeb=mbofla=
`Ü~åÖÉë=áå=Å~ëÜ=~åÇ=Å~ëÜ=Éèìáî~äÉåíë=	ÓNINSP	PIPUN=
`~ëÜ=~åÇ=Å~ëÜ=Éèìáî~äÉåíë=~í=ÄÉÖáååáåÖ=çÑ=íÜÉ=éÉêáçÇ=	OMITSR	OPISRM=
`~ëÜ=~åÇ=Å~ëÜ=Éèìáî~äÉåíë=~í=íÜÉ=ÉåÇ=çÑ=íÜÉ=éÉêáçÇ=	NVISMO	OTIMPN=

Statement of Changes in Equity

from 1 January 2010 until 31 March 2010 according to IFRS

	kìãÄÉê=çÑ= ëÜ~êÉë=áëëìÉÇ=	pÜ~êÉ=Å~éáí~ä	^ÇÇáíáçå~ä é~áÇJáå= Å~éáí~ä	oÉëÉêîÉ=Ñçê íêÉ~ëìêó= ëíçÅâ	líÜÉê= êÉëÉêîÉë	^ÅÅìãìä~íÉÇ= äçëëÉë=	qçí~ä=
	kìãÄÉê=	hbro	hbro	hbro	hbro	hbro=	hbro=
^ë=çÑ=PN=aÉÅÉãÄÉê=OMMU=	NNIVMMIMMM=	PMIQSQ	PNISQO	ÓOS	OTR	ÓOTISPO=	PPITOP=
Group comprehensive result after tax					–1,864	6,603	4,739
Capital increase from cash contribution	1,189,999	3,046	6,001				9,047
Capital increase in exchange for stock	2,607,367	6,675	12,079				18,754
Share buybacks				–1			–1
Disposal of own shares				27			27
Set off accumulated loss			–14,478			14,478	0
^ë=çÑ=PN=aÉÅÉãÄÉê=OMMV=	NRISVTIPSS=	QMINUR	PRIOQQ	M	ÓNIRUV	ÓTIRRN=	SSIOUV=
Group comprehensive result after tax					431	1,154	1,585
Capital increase in exchange for stock		0	–96				-96
^ë=çÑ=PN=j~êÅÜ=OMNM=	NRISVTIPSS=	QMINUR	PRINQU	M	ÓNINRU	ÓSIPVT=	STITTU=

Shares and Options held by Management Board and Supervisory Board as of 31 March 2010

	pÜ~êÉë	léíáçåë=
j~å~ÖÉãÉåí=_ç~êÇ=
Dr. Harald Schrimpf	71,000	0
Armin Stein	23,300	0
pìéÉêîáëçêó=_ç~êÇ=
Dr. Ralf Becherer	2,268	0
Wilfried Götze	54,683	0
Bernd Haus	1,000	0
Barbara Simon	7,890	0
Karsten Trippel	124,450	0
Prof. Dr. Rolf Windmöller	6,305	0

The Management Board of PSI had earnings of KEUR 482 in the first three months of 2010, which consist of a fixed component of KEUR 112 and a variable component of KEUR 370.

Because Supervisory Board payments are made in the 4th quarter of the year, the Supervisory Board did not obtain any remuneration in the first three months of 2010.

Notes on the consolidated financial statements as of 31 March 2010

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NK _ìëáåÉëë=^ÅíáîáíáÉë=~åÇ=iÉÖ~ä=_~ÅâÖêçìåÇ=

The business activities of PSI AG and its subsidiaries relate to the development and sale of software systems and products fulfilling the specific needs and requirements of its customers, particularly in the following industries and service lines: utilities, manufacturing, logistics, telecommunications, safety and transport. In addition, the Group provides services of all kinds in the field of data processing, sells electronic devices and operates data processing systems.

The PSI Group is divided into the three core business segments energy management, production management and infrastructure management. The company is listed in the Prime Standard segment of the Frankfurt stock exchange.

The company is exposed to a wide range of risks that are similar to other companies active in the dynamic technology sector. Major risks for the development of the PSI Group lie in the success with which it markets its software systems and products, competition from larger companies, the ability to generate sufficient cash flows for future business development as well as in individual risks regarding the integration of subsidiaries, organizational changes and the cooperation with strategic partners.

The condensed interim consolidated financial statements for the period from 1 January 2010 to 31 March 2010 were released for publication by a decision of the management on 26 April 2010.

The condensed interim consolidated financial statements for the period from 1 January 2010 to 31 March 2010 were produced in compliance with IAS 34 "Interim Financial Reporting". The condensed interim consolidated financial statements do not contain all the data and notes prescribed for the annual financial statements and should be read in conjunction with the consolidated financial statements for 31 December 2009.

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With regard to the principles of accounting and valuation and especially the application of International Financial Reporting Standards (IFRS) see the group consolidated financial statements for the financial year 2009.

PK pÉ~ëçå~ä=fåÑäìÉåÅÉë=çå=íÜÉ=_ìëáåÉëë=^ÅíáîáíáÉë

Seasonal effects resulted in the PSI Group operations with regards to the receipt of maintenance revenues in the first quarter of the financial year (deferment of the influences on the result of corresponding incoming payments throughout the year) and significantly greater demand and project accounting in the fourth quarter of the financial year.

QK Ü~åÖÉë=áå=íÜÉ=çåëçäáÇ~íáçå=dêçìé=

Compared to 31 December 2009 there were no changes in the consolidation group.

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	PN=j~êÅÜ=OMNM	PN=aÉÅÉãÄÉê=OMMV=
	hbro=	hbro=
Bank balances	11,051	13,597
Fixed term deposits	8,512	7,134
Cash	39	34
	NVISMO=	OMITSR=

`çëíë=~åÇ=Éëíáã~íÉÇ=É~êåáåÖë=áå=ÉñÅÉëë=çÑ=ÄáääáåÖë=çå=ìåÅçãéäÉíÉÇ=Åçåíê~Åíë=

Costs and estimated earnings in excess of billings on uncompleted contracts arise when revenues have been recorded but the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of the contract. Costs and estimated earnings contain directly allocable costs (labor cost and cost of services provided by third parties) as well as the appropriate portion of overheads including pro rata administrative expenses.

Costs and estimated earnings on uncompleted contracts and related amounts are billed as follows:

	PN=j~êÅÜ=OMNM	PN=aÉÅÉãÄÉê=OMMV=
	hbro=	hbro=
Costs incurred on uncompleted contracts	82,145	69,876
Profit shares	18,577	16,274
`çåíê~Åí=êÉîÉåìÉ=	NMMITOO=	USINRM=
Payments on account	73,580	68,862
Set off against contract revenue	–60,250	–53,464
Receivables from long-term construction contracts	40,472	32,686
Liabilities from long-term construction contracts	13,330	15,398

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The main components of the income tax expenditure shown in the group income statement are added as follows:

	PN=j~êÅÜ=OMNM hbro=	PN=aÉÅÉãÄÉê=OMMV= hbro=
Effective taxes expenses
Effective tax expenses	–149	–718
Deferred taxes
Emergence and reversal of
temporary differences	–59	376
q~ñ=ÉñéÉåëÉëLáåÅçãÉ=	ÓOMU=	ÓPQO=

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The development of the segment results can be found in the Group segment reporting.

Segments of the PSI Group:

• Energy Management: Intelligent solutions for energy suppliers from the electricity, gas, oil and water markets. Focal points are reliable and economically sound solutions for the network management and trade and sales management in the liberalised energy market.
• Production Management: Software products and individual solutions for production planning, special tasks in production control and efficient logistics. Focuses are the optimisation of the use of resources and the increase of quality and profitability.
• Infrastructure Management: High-availability control system solutions designed for monitoring and economically sound operation of infrastructures in the telecommunications, transportation, public safety, environmental protection and disaster prevention areas.

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To the best of our knowledge, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the group's development and performance of its position, together with a description of the principal opportunities and risks associated with the expected development of the group in the remaining months of the financial year, in accordance with German proper accounting principles of interim consolidated reporting.

Group Segment Reporting

from 1 January 2010 until 31 March 2010 according to IFRS

		båÉêÖó=		mêçÇìÅíáçå=		fåÑê~ëíêìÅíìêÉ=
		j~å~ÖÉãÉåí=		j~å~ÖÉãÉåí=		j~å~ÖÉãÉåí=	oÉÅçåÅáäá~íáçå			mpf=dêçìé=
	PNLMPL= OMNM= hbro=	PNLMPL OMMV= hbro	PNLMPL OMNM hbro	PNLMPL OMMV hbro	PNLMPL OMNM hbro	PNLMPL OMMV hbro	PNLMPL OMNM hbro	PNLMPL OMMV hbro	PNLMPL= OMNM= hbro=	PNLMPL= OMMV= hbro=
p~äÉë=êÉîÉåìÉë=									=	=
Sales to external customers	15,537	13,637	15,462	14,489	6,134	2,449	0	0	37,133	30,575
Inter-segment sales	790	47	614	352	415		444 –1,819	–843	0	0
pÉÖãÉåí=êÉîÉåìÉë=		NSIPOT= NPISUQ NSIMTS NQIUQN			SIRQV		OIUVP ÓNIUNV	ÓUQP		PTINPP= PMIRTR=
Other operating income	781	997	1,381	1,659	338		441 –1,025 –1,404		1,475	1,693
Changes in inventories of work in progress	0	-50	0	104	7	6	0	0	7	60
Cost of purchased services	–646	–592	–1,325	–1,198	–767	-251	280	201	–2,458	–1,840
Cost of purchased materials	–1,968	–1,107	–385	–593	–1,583	–51	631	101	–3,305	–1,650
Personnel expenses	–9,741		–8,770 –10,572	–9,545	–2,863	–1,959	–39		-83 –23,215 –20,357
Depreciation and amortization	–253	–320	–214	–221	–133	–61	–15	–4	–615	–606
Other operating expenses	–2,969	–2,916	–4,506	–4,333	–1,207	–820	1,818	1,969	–6,864	–6,100
léÉê~íáåÖ=êÉëìäí== ÄÉÑçêÉ=áåíÉêÉëíI=í~ñI= ÇÉéêÉÅá~íáçå=~åÇ= ~ãçêíáë~íáçå	NITUQ=	NIOQS	SSV	VPR	QTQ	ORV	ÓNRQ	ÓRV	OITTP=	OIPUN=
léÉê~íáåÖ=êÉëìäí=ÄÉÑçêÉ= ÇÉéêÉÅá~íáçå=~åÇ= ~ãçêíáë~íáçå=êÉëìäíáåÖ= Ñêçã=éìêÅÜ~ëÉ=éêáÅÉ= ~ääçÅ~íáçå=	NIRPN=	VOS	QRR	TNQ	PQN	NVU	ÓNSV	ÓSP	OINRU=	NITTR=
Depreciation and amortisation resulting from purchase price
allocation	–33	–33	–283	–30	–88	0	0	0	–404	–63
léÉê~íáåÖ=êÉëìäí=	NIQVU=	UVP	NTO	SUQ	ORP	NVU	ÓNSV	JSP	NITRQ=	NITNO=
Interest income	–150	–162	–189	–140	–53	–11	0	0	–392	–313
oÉëìäí=ÄÉÑçêÉ== áåÅçãÉ=í~ñÉë=	NIPQU=	TPN	ÓNT	RQQ	OMM	NUT	ÓNSV	JSP	NIPSO=	NIPVV=
pÉÖãÉåí=~ëëÉíë=										QUIRSN= QOIOPM RUIQOV QSIOMM QMINSO NOIPST RISMU PINQS NROITSM=NMPIVQP=
pÉÖãÉåí=äá~ÄáäáíáÉë=					OQIVUR= NVIQOT PUITPV POIQUU NRIUUT NMIQPV RIPSV SIRRO					UQIVUM= SUIVMS=
pÉÖãÉåí=áåîÉëíãÉåíë=	NOV=	NTQ	NOO	NVN	TQ	PP	PST	NUU	SVO=	RUS=

cáå~åÅá~ä=`~äÉåÇ~ê=

15 March 2010	Publication Annual Result 2009
15 March 2010	Analyst Conference
28 April 2010	Report on the 1st Quarter of 2010
3 May 2010	Annual General Meeting
30 July 2010	Report on the 1st Six Months of 2010
28 October 2010	Report on the 3rd Quarter of 2010
November 2010	Analyst Presentation, German Equity Forum

vçìê=fåîÉëíçê=oÉä~íáçåë=Åçåí~Åí=éÉêëçåW=

Karsten Pierschke

Telephone:	+49 30 2801-2727
Fax:	+49 30 2801-1000
E-Mail:	kpierschke@psi.de

We will be happy to include you in our distribution list for stockholder information. Please contact us should you require other information material.

For the latest IR information, please visit our website at www.psiag.com/ir.

PSI Aktiengesellschaft für Produkte und Systeme der Informationstechnologie

Dircksenstraße 42-44 10178 Berlin Germany Telephone: +49 30 2801-0 Fax: +49 30 2801-1000 ir@psi.de www.psi.de