Software AG

Earnings Release • Jul 15, 2014

News Details

Ad-hoc | 15 July 2014 00:15

Software AG: DELAYS IN LARGE-DEAL PROJECTS SLOWS LICENSE GROWTH – TARGET OPERATING MARGIN BETWEEN 26 AND 28 PERCENT

Software AG / Key word(s): Preliminary Results/Change in Forecast

15.07.2014 00:15

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Ad-hoc release according to § 15 WpHG
DELAYS IN LARGE-DEAL PROJECTS SLOWS LICENSE GROWTH -
TARGET OPERATING MARGIN BETWEEN 26 AND 28 PERCENT

[Note: All figures are provisional and rounded and may possibly still
change. All percentages in the text are at constant currency.]

Darmstadt, July 14, 2014 - After an initial consolidation, Software AG
(Frankfurt TecDAX: SOW) announced preliminary financial results for the
second quarter of 2014. While sales in the ETS business developed as
expected, the BPE business line was marked by a surprising reluctance by
customers to commit to major infrastructure projects. Accordingly the
annual forecast has been adjusted.

The Business Process Excellence (BPE) division had revenues of EUR85
million (previous year: EUR91.4 million) in the second quarter. License
revenue with EUR33 million (previous year: EUR42.8 million) was under the
previous year's level. Maintenance revenue, however, rose in the second
quarter to EUR52 million (previous year: EUR48.6 million), an operating
growth by 11 percent.

The traditional database business Enterprise Transaction Systems (ETS) was
in line with expectations, with sales of EUR56 million (previous year:
EUR75.8 million). License revenue amounted to EUR17 million (previous year:
EUR32.6 million). ETS maintenance revenue was around EUR38 million euros
(previous year: EUR43.1 million).

The Consulting division reported revenues of around EUR56 million (previous
year: EUR70.5 million). The main reason was the deconsolidation of the SAP
service activities. After the sale of the business focused on third-party
solutions, Software AG will concentrate exclusively on the development,
distribution and service of its own products.

The operating profit (non-IFRS) decreased in the second quarter to EUR45
million (previous year: EUR58.7 million); this corresponds to an operating
margin of 23 percent. The reported EBIT (IFRS) was impacted by one-off
effects from the deconsolidation of the SAP consulting business and is
approximately EUR25 million (previous year: EUR44.4 million).

Outlook
Due to the significant delays in major projects in the second quarter, the
Group now expects full year 2014 BPE revenue to remain approximately at the
previous year's level. Revenue forecast in the traditional database
business ETS remains unchanged at a reduction of 16 percent to 9 percent
(net of currency effects). The company expects an operating margin
(non-IFRS) of 26-28 percent for the full year 2014 (previous year: 26.8
percent).

Software AG will give further details in a conference call on July 15, 2014
at 09:00 clock CET. Dial-in details are as follows: Germany +49 (0) 69 566
036 000 | UK +44 (0) 203 059 5869 | USA +1 (1) 631 302 6547. The company
will publish its full quarterly results on 24 July 2014.

About Software AG
Software AG (Frankfurt TecDAX: SOW) helps organizations achieve their
business objectives faster. The company's big data, integration and
business process technologies enable customers to drive operational
efficiency, modernize their systems and optimize processes for smarter
decisions and better service. Building on over 40 years of customer-centric
innovation, the company is ranked as a "leader" in fifteen market
categories, fueled by core product families Adabas and Natural, ARIS,
Terracotta, webMethods, Alfabet and Apama. Software AG has more than 4,600
employees in 70 countries and had revenues of 973 million in 2013. Learn
more at www.softwareag.com

Software AG - GetThereFaster
Software AG | Uhlandstraße 12 | 64297 Darmstadt | Germany

Detailed press information about Software AG including a picture and
multimedia database are available at: www.softwareag.com/press

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Software AG Germany | Software AG USA

Contact:

Byung-Hun Park Barbara Kögler
Senior Manager Financial Senior Vice President Corporate
Communications Communications
Uhlandstrasse 12 Uhlandstrasse 12
64297 Darmstadt 64297 Darmstadt
Germany Germany

Tel: +49 (0)6151 92 2070 Tel: +49 (0)6151 92 1574
Fax: +49 (0)6151 92 34 2070 Fax: +49 (0)6151 92 34 1243
E-Mail: byung- E-Mail: barbara.koegler@softwareag.com
hun.park@softwareag.com http://www.softwareag.com
http://www.softwareag.com

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Language: English
Company: Software AG
Uhlandstraße 12
64297 Darmstadt
Germany
Phone: +49 (0)6151 92-1900
Fax: +49 (0)6151 92-34 1899
E-mail: Investor.Relations@softwareag.com
Internet: www.softwareag.com
ISIN: DE0003304002
WKN: 330400
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of Announcement DGAP News-Service

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