ATOSS Software AG — Interim / Quarterly Report 2012

Nov 15, 2012

Quarterly Report

ATOSS customer LEITNER

ATOSS Quarterly Report 03.2012

Letter to Shareholders

Dear Shareholders, Customers, Business Partners and Employees,

ATOSS Software AG continues its record performance! The development in business, in the third quarter in particular, was very gratifying. Demand for ATOSS products and solutions has developed briskly relative to the second quarter, while interest in our workforce management topics continues unabated.

ATOSS has now been in business for 25 years! We are proud to be so well positioned, not just in respect of our performance figures and the varied capabilities of our products and services, but also in terms of the competence and commitment of our employees and our relationships with our customers. The benefits are also enjoyed by our shareholders, very many of whom are long-term investors. They appreciate the stability and quality that mark us out, all the more so in the turbulence of recent years.

ATOSS remains focused on innovation and the development of existing strengths

We at ATOSS are concerned with consistently reinforcing our success through the continuous development of our solutions, as well as through innovations aimed at delivering decisive customer benefits.

Some outstanding examples of such innovations include the ATOSS Connector, which now affords SAP® users direct access to the ATOSS personnel resource planning solution, as well as our latest breakthroughs in the fields of mobility and business intelligence (BI). With ATOSS Mobile Workforce Management, a module of the ATOSS Staff Efficiency Suite and the ATOSS Startup Edition, our customers' managers and employees can access current, relevant data whenever and wherever they are by smartphone or tablet and initiate and process the appropriate workflows (e.g. absences, scheduling dialogs etc.). Mobility is without doubt a growth area. According to the industry association BITKOM, it is one of the strongest driving forces in the technology market.

Meanwhile, demand for our core solutions such as the ATOSS Retail Solution continues unabated. In view of the results of current projects, such as for example a substantial reduction in personnel cost ratios, significant sales increases and a markedly higher conversion rate, this is not surprising. During the reporting period ATOSS has continued to acquire additional prominent new customers in the retail sector: denn's organic food stores, the number 1 in Germany, Rudolf Wöhrl AG and Starbucks Coffee are among those to have opted for the specially tailored ATOSS Retail Solution. The popularity of this solution is a clear sign of future growth potential, as is the acquisition of new customers in such widely varying fields as the medical, manufacturing, logistics and hospitality sectors.

The outlook for 2012 remains positive

As you see, the outlook remains positive as the upward trend in sales and earnings continues without change. We remain on course for growth, and we consider the future prospects for workforce management to be outstanding. Against this background and in view of the influx of orders for software licenses in the third quarter in particular, we expect to see moderate full-year growth, with a margin on sales measured against operating profits (EBIT) securely above 20 percent.

Yours sincerely

Andreas F.J. Obereder Christof Leiber Chief Executive Officer Member of the Board

of Management

Facts Overview

Economic background

Federal government growth forecast for 2012: Gross domestic product +0.8 percent (2013: +1.0 percent) ICT sector: Anticipated growth in Germany of +2.8 percent in 2012 stands out as a positive exception BITKOM: Mobility is one of the strongest driving forces in the technology market

ATOSS Software AG

Nine-month results for 2012 again set new records Full-year outlook: Moderate sales growth with an EBIT margin securely above 20 percent Growth in all target fields and sectors

CONSOLIDATED OVERVIEW AS PER IFRS: 9-MONTH COMPARISON IN TEUR

	01.01.2012 - 30.09.2012	Proportion of total sales	01.01.2011 - 30.09.2011	Proportion of total sales	Change 2012 / 2011
Total Sales	24,515	100%	23,346	100%	5%
Software	14,851	61%	13,930	60%	7%
Licenses	5,056	21%	4,914	21%	3%
Maintenance	9,795	40%	9,016	39%	9%
Consulting	6,534	27%	6,236	27%	5%
Hardware	2,063	8%	2,199	9%	-6%
Other	1,067	4%	981	4%	9%
EBITDA	6,340	26%	5,900	25%	7%
EBIT	5,918	24%	5,542	24%	7%
EBT	6,756	28%	6,599	28%	2%
Net income	4,563	19%	4,476	19%	2%
Cash Flow	5,300	22%	6,959	30%	-24%
Liquidity (1/2)	28,656		26,349		9%
EPS (in EUR)	1.15		1.13		2%
Employees (3)	270		259		4%

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN TEUR

	Q3/12	Q2/12	Q1/12	Q4/11	Q3/11
Total Sales	8,242	8,437	7,836	8,229	7,584
Software	4,977	5,017	4,857	4,891	4,651
Licenses	1,655	1,745	1,656	1,772	1,586
Maintenance	3,322	3,272	3,201	3,119	3,065
Consulting	2,048	2,248	2,238	2,145	1,931
Hardware	851	665	547	607	764
Other	366	507	194	586	239
EBITDA	2,028	2,207	2,105	1,894	1,792
EBIT	1,881	2,070	1,967	1,766	1,665
EBIT margin (in %)	23%	25%	25%	21%	22%
EBT	2,283	2,147	2,326	1,812	2,617
Net income	1,551	1,465	1,547	1,199	1,772
Cash Flow (4)	3,143	-1,001	3,158	-1,641	3,117
Liquidity (1/2)	28,657	24,615	28,496	24,851	26,349
EPS (in EUR)	0.39	0.37	0.39	0.30	0.45
Employees (3)	270	266	265	269	259

(1) Cash and cash equivalents, current and non-current financial assets (e.g. gold, equities)

(2) Dividend of EUR 0.71 per share on 23.04.2012 (TEUR 2,823), previous year EUR 0.60 per share (TEUR 2,386)

(3) At the end of the quarter/half

(4) Cash flow adaption per share in comparison to the values reported last year for interest income and expenditure, since from December 31, 2011 this is reported within cash flow from investment activities.

Investor Relations

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN EUR

	Q3/12	Q2/12	Q1/12	Q4/11	Q3/11
High	22.04	22.80	22.09	17.40	18.34
Low	19.11	18.76	16.55	16.20	15.50
Share price at end of quarter	21.00	19.84	21.50	16.56	17.05
Treasury stock	0.00	0.00	0.00	49,099	49,099
Dividend paid per share	0.00	0.71	0.00	0.00	0.00
Cash flow per share (1)	0.79	-0.25	0.79	-0.41	0.78
Liquidity per share (2)	7.21	6.19	7.17	6.25	6.63
EPS	0.39	0.37	0.39	0.30	0.45
EPS (diluted)	0.39	0.37	0.39	0.30	0.45

(1) Cash flow adaption per share in comparison to the values reported last year for interest income and expenditure, since from December 31, 2011 this is reported within cash flow from investment activities.

(2) Liquid assets per share comprise cash and cash equivalents as well as current and non-current financial assets (e.g. gold, equities)

Focus on a long-term commitment to ATOSS

The price of ATOSS stock has developed very strongly in recent years. In addition to this welcome asset growth, our shareholders have also participated in the company's consistently growing profits through a variety of distributions. From the beginning of 2007 to the end of September 2012, the share price rose almost twice as strongly as the relevant benchmark Daxsubsector Software Performance Index. During that period ATOSS shares put on 101 percent, while the index rose 52 percent.

A short-term comparison shows that from the beginning of October 2011 until the end of the reporting period, the price of ATOSS stock climbed by around 23 percent. Taking into account the dividend payment of EUR 0.71, the increase was around 27 percent. In the same period the Daxsubsector Software Performance Index rose by some 51 percent. This was, however, dominated in the third quarter in particular by the substantial gains recorded by index heavyweight SAP®.

The potential of ATOSS stock continues to enjoy positive ratings in regular reports appearing in the financial media. At the beginning of October, for example, ATOSS stock was recommended by Börse Online as the "top software stock for long-term investors". With its "exuberant profits, solid growth and respectable dividend", ATOSS had "plenty to offer for investors".

Dividend policy increases stability

Particularly in turbulent times, and with an eye to the prevailing low interest rates, a dependable, investor-friendly dividend policy is attractive. With earnings per share constantly rising, ATOSS remains true to its established policy and distributes around half its profits to its shareholders.

ATOSS: EARNINGS/SHARE PER 31.12. IN EUR

Earnings per share in the third quarter of 2012 amounted to EUR 0.39, bringing total EPS for the period from January to September 2012 to EUR 1.15. In view of the positive business trends, other key figures too have developed more than satisfactorily. Cash flow per share in the third quarter remained high at EUR 0.79, while liquidity as of September 30, 2012 amounted to EUR 7.21 compared with EUR 6.63 in the year before. The fact is that ATOSS remains a very solid stock backed by some extremely sound figures.

Based on the consistent full-year forecasts for 2012, on October 23 this year, analysts at Warburg Research reiterated their "hold" rating. In their assessment the analysts stressed that ATOSS had slightly exceeded expectations for the third quarter and the full-year forecast should therefore be easily achievable. They also went on to emphasize in particular the continuing development in orders received at last year's high level, the excellent quality of the ATOSS balance sheet, strong cash flow and a further increase in liquidity after taking the dividend payment into account. The upside target for the share price remains at EUR 22.20.

Further information: www.atoss.com

Group Management Report

1. Business and conditions: Euro crisis weighs on the economy

The global economy in autumn 2012 once again finds itself in a state of weakness. The economic clouds are gathering over almost every sector, and the mood among businesses and consumers alike has deteriorated still further. One of the material factors is the debt crisis, and indeed the crisis of confidence that has been sustained in the eurozone since last year, that exercises a substantial influence over the German economy. This was exacerbated earlier on in the spring by fresh problems in the crisis-hit states which in turn triggered turbulence on the financial markets and added to the state of economic uncertainty.

With clouds gathering over the global economy, Germany suffered a further decline in business confidence. The business climate index for manufacturing industry in Germany published by the ifo Institute fell in September for the fifth time in succession. Business expectations, too, have deteriorated month by month since April and have latterly reached their lowest level since the recession in 2008/2009.

According to the autumn 2012 Joint Economic Forecast, in view of the impact of the euro crisis on the German economy, economic expansion will for the time being remain weak, before recovering slightly in the course of next year. The institutes forecast a slight increase in GDP of 0.8 percent in 2012 (previous year: 3.0 percent), followed by 1.0 percent in 2013.

The debt crisis in Europe and the fraught situation on the financial markets have not left the ITC markets entirely unscathed, though in comparison with the economy as a whole the sector has remained stable. According to BITKOM's economic survey, two thirds of German high-tech companies recorded rising sales in the third quarter. However the proportion of IT and telecommunication companies reporting a decline in sales has risen from 13 percent to 21 percent. With this in mind, for 2012 BITKOM is forecasting growth of 2.3 percent in the IT sector, followed by 3.0 percent in 2013.

Regardless of this development both in the economy as a whole and in the IT environment, in the first nine months ATOSS has succeeded in setting new sales and earnings records. In its core software business the company achieved growth of 7 percent. There was also a welcome development in orders received for software licenses in particular in the third quarter. At EUR 2.0 million, the volume of orders booked in Q3 was well up on the previous year (EUR 1.5 million).

2. Earnings position: Renewed records in sales and earnings development

In the first nine months of financial year 2012 ATOSS recorded revenues up 5 percent at EUR 24.5 million (previous year: EUR 23.3). In our core software business sales climbed 7 percent from EUR 13.9 million to EUR 14.9 million. Software maintenance, too, continued to develop positively with turnover increasing by 9 percent from EUR 9.0 million to EUR 9.8 million.

In the consulting area, ATOSS recorded growth of 5 percent in the first nine months of 2012, with revenues rising from EUR 6.2 million last year to EUR 6.5 million.

The operating profit (EBIT) was 7 percent higher than in the previous year, rising from EUR 5.5 million to EUR 5.9 million.

Earnings before taxes (EBT) climbed 2 percent in the reporting period from EUR 6.6 million to EUR 6.8 million.

Net income to 30 September 2012 came in at EUR 4.6 million, representing growth of 2 percent relative to the EUR 4.5 million recorded in the same period last year. Earnings per share accordingly increased from EUR 1.13 to EUR 1.15.

As of the end of September incoming orders were at the same level as previous year at EUR 4.8 million. Orders on hand for software licenses stood at EUR 3.0 million (previous year: EUR 2.9 million). This is providing a good starting point for the current fourth quarter 2012 and the next financial year 2013.

3. Net assets and financial position

In the first nine months of financial year 2012 cash flow from operations came in at EUR 5.3 million (previous year: EUR 7.0 million). Cash and equivalents slipped from EUR 17.5 million to EUR 15.9 million. The position as a whole, however, comprising cash and equivalents and other current and non-current financial assets (e.g. gold, equities) increased from EUR 26.3 million to EUR 28.7 million. Liquidity per share on 30.09.2012 including these current and non-current assets accordingly stood at EUR 7.21 (previous year: EUR 6.63).

The decline in cash and equivalents relative to the year before is attributable to a redistribution of investments in other current and non-current financial assets. With this change in investment strategy the company intends to emphasize its focus on safeguarding long-term value and hedging against inflation and take adequate precautions against the effects of an increase in money supply and the steep rise in the sovereign debt ratios in numerous euro zone states as well as in the United States.

In total, the Management Board is authorized by the Supervisory Board to invest in physical gold in an amount of up to EUR 17.0 million and in dividend-bearing securities in an amount of up to EUR 5.0 million. On September 30, 2012 the company had EUR 8.8 million invested in gold and EUR 3.2 million invested in dividend-bearing securities.

In addition to net earnings of EUR 4.6 million, the EUR 5.3 million in cash flow from operations was also boosted by an increase in deferred revenues of EUR 3.4 million. Cash flow reducing effects induced by reduction of trade accounts payable and other liabilities of EUR 1.1 million and by reduction of tax provision of EUR 1.0 million.

ATOSS also recorded an equity ratio of 66 percent (previous year: 60 percent). The company thus remains extremely well capitalized, with solvency assured at all times.

4. Product development

A high level of expenditure on research and development remains an important component of the ATOSS growth strategy with the goal of further extending the company's strong position as a technological leader in workforce management. Research and development costs rose by 8 percent in the first nine months at EUR 5.3 million (previous year: EUR 4.9 million). Research and development costs as a proportion of overall sales amounted to 22 percent (previous year: 21 percent).

The company continues to refrain from capitalizing the expense of developing new products. All expenditure for this purpose is recognized in the income statement in the period in which it is incurred.

5. Employees

As compared to previous year the number of employees rose from 259 to 270. On September 30, 2012 ATOSS employed 118 software developers (previous year: 117), with a further 72 staff employed in consulting (previous year: 68), 38 in sales and marketing (previous year: 37) and 42 in administration (previous year: 37).

Personnel costs for the first nine months of the current financial year amounted to EUR 12.0 million (previous year: EUR 11.1 million).

6. Risks associated with future development

There has been no change in the company's risk structure relative to the description contained in the consolidated financial statements to December 31, 2011.

7. Events after the reporting period

Within the defined investment strategy the company has acquired physical gold in the amount of EUR 5.0 million in October 2012.

There have been no further reportable events of particular significance since September 30, 2012.

8. Outlook

Having delivered its nine-months figures, ATOSS is able to report a continuing positive trend in sales and earnings. In view of this development and in consideration of the orders received and on hand, the Management Board continues to expect moderate full-year growth in 2012 with an EBIT margin securely above 20 percent.

CONSOLIDATED BALANCE SHEET TO 30.09.2012 IN EUR

Assets	30.09.2012	31.12.2011
Non-current assets
Tangible fixed assets	2,828,992	2,948,852
Intangible assets	151,177	177,184
Other financial assets	630,295	553,450
Deferred taxes	292,197	277,534
Total non-current assets	3,902,661	3,957,020
Current assets
Inventories	8,130	8,199
Trade accounts receivable	2,614,252	2,611,623
Other financial assets	12,153,664	9,180,200
Other non-financial assets	1,014,090	518,104
Cash and equivalents	15,871,729	15,117,296
Total current assets	31,661,865	27,435,422
Total assets	35,564,526	31,392,442
Equity and Liabilities	30.09.2012	31.12.2011
Equity
Subscribed capital	3,976,568	4,025,667
Capital reserve	-661,338	-387,528
Treasury stock	0	-322,909
Equity deriving from unrealized profits/losses	705,698	205,237
Unappropriated net income	19,325,156	17,585,809
Total equity	23,346,084	21,106,276
Non-current liabilities
Pension provisions	1,726,757	1,716,969
Deferred taxes	839,880	321,766
Total non-current liabilities	2,566,637	2,038,735
Current liabilities
Trade accounts payable	335,901	790,104
Other liabilities	3,990,613	4,622,107
Deferred revenues	5,151,433	1,702,752
Tax provisions	79,858	1,038,468
Other provisions	94,000	94,000
Total current liabilities	9,651,805	8,247,431
Total equity and liabilities	35,564,526	31,392,442

CONSOLIDATED INCOME STATEMENT FROM 01.01.2012 TO 30.09.2012

		Quarterly report	9-months report
	01.07.2012 -30.09.2012	01.07.2011 -30.09.2011	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Sales	8,242,119	7,584,286	24,515,413	23,346,121
Cost of sales	-2,452,328	-2,247,178	-7,166,972	-6,918,378
Gross profit on sales	5,789,791	5,337,108	17,348,441	16,427,743
Selling costs	-1,436,638	-1,301,039	-4,021,667	-4,030,207
Administration costs	-696,086	-673,882	-2,096,108	-1,941,665
Research and development costs	-1,745,519	-1,684,047	-5,302,101	-4,927,642
Other operating expenses	-31,221	-62,554	-60,453	-100,670
Other operating income	735	48,824	49,614	114,387
Operating profit (EBIT)	1,881,062	1,664,410	5,917,726	5,541,946
Interest and similar income	454,525	1,855,293	1,114,269	1,998,934
Interest and similar expenses	-52,633	-902,485	-276,149	-941,741
Earnings before taxes (EBT)	2,282,954	2,617,218	6,755,846	6,599,139
Taxes on income and earnings	-731,952	-845,288	-2,193,136	-2,123,031
Net income	1,551,002	1,771,930	4,562,710	4,476,108
Earnings per share (undiluted)	0.39	0.45	1.15	1.13
Earnings per share (diluted)	0.39	0.45	1.15	1.13
Average number of shares in circulation (undiluted)	3,976,568	3,976,568	3,976,568	3,975,121
Average number of shares in circulation (diluted)	3,976,568	3,976,568	3,976,568	3,976,568

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FROM 01.01.2012 TO 30.09.2012 IN EUR

	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Net income	4,562,710	4,476,108
Changes not recognized in profit and loss resulting from the sale/purchase of treasury stock	0	41,050
Changes not recognized in profit or loss resulting from available-for-sale financial assets	662,831	-49,666
Income tax effects	-162,370	27,865
Other income for the period after taxes	500,461	19,249
Comprehensive income after taxes	5,063,171	4,495,357

C O N S OL I DA T ED INC O M E ST A T E M E N T C O N S OL I DA T ED ST A T E M E NT OF C O M PRE H E NSI VE INC O M E C O N S OL I DA T ED C A SH FLO W ST A T E M E N T

CONSOLIDATED CASH FLOW STATEMENT FROM 01.01.2012 TO 30.09.2012 IN EUR

	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Cash Flow from business operations (1)
Net income	4,562,710	4,476,108
Depreciation of fixed assets	422,361	357,825
Gains/Losses from the disposal of fixed assets	370	255
Gains/Losses from the sale of available-for-sale financial assets	-612,135	-1,842,618
Other result on financial asset	-329,632	733,622
Change in deferred taxes	503,451	-267,442
Change in pension provisions	9,788	-35,456
Adjustment for other items not recognized in profit or loss	-162,371	18,303
Change in net current assets
Trade accounts receivable	-2,629	760,481
Inventories and other assets	-495,916	-132,503
Trade accounts payable	-454,203	-479,759
Other liabilities	-631,495	-331,322
Deferred revenues	3,448,681	3,674,398
Tax provisions	-958,610	27,547
Cash flow from business operations (1)	5,300,370	6,959,439
Cash flow from investing activities
Disbursements for the acquisition of tangible and intangible fixed assets	-276,864	-425,552
Receipts from the disposal of other financial assets	4,220,078	15,552,706
Disbursements for the acquisition of other financial assets	-5,778,148	-23,054,921
Receipts from interests	112,442	143,659
Disbursements for interests	-82	-1,319
Cash flows generated from investing activities (2)	-1,722,574	-7,785,427
Cash flow from financing activities
Income from the sale of treasury stock	0	41,050
Dividend payments	-2,823,363	-2,385,941
Cash flows from financing activities (3)	-2,823,363	-2,344,891
Changes in cash and equivalents – total of (1) to (3)	754,433	-3,170,879
Cash and equivalents at the beginning of the period	15,117,296	20,691,419
Cash and equivalents at the end of the period	15,871,729	17,520,540

(1) Operating cash flow adjusted relative to figures reported in the previous year to allow for reported interest income and expenses, since from December 31, 2011 this is reported within cash flow from investment activities.

ATOSS customer eterna

	Subscribed capital	Capital reserve	Treasury stock	Equity deriving from unrealized profits/losses	Unappro priated net income	Total
As of 01.01.2011	4,025,667	-375,203	-376,284	0	14,296,435	17,570,615
Net income	0	0	0	0	4,476,108	4,476,108
Sale of treasury stock	0	-12,325	53,375	0	0	41,050
Purchase of treasury stock	0	0	0	0	0	0
Dividend	0	0	0	0	-2,385,941	-2,385,941
Other changes in equity	0	0	0	-21,801	0	-21,801
As of 30.09.2011	4,025,667	-387,528	-322,909	-21,801	16,386,602	19,680,031
As of 01.01.2012	4,025,667	-387,528	-322,909	205,237	17,585,809	21,106,276
Net income	0	0	0	0	4,562,710	4,562,710
Withdrawal of treasury shares	-49,099	-273,810	322,909	0	0	0
Dividend	0	0	0	0	-2,823,363	-2,823,363
Other changes in equity	0	0	0	500,461	0	500,461
As of 30.09.2012	3,976,568	-661,338	0	705,698	19,325,156	23,346,084

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TO 30.09.2012 IN EUR

One share represents 1 euro of subscribed capital.

Notes to the consolidated financial statement

1. General

The present report has been prepared in accordance with International Financial Reporting Standards (IFRS) in compliance with IAS 1.14. In particular the report complies with the provisions contained in IAS 34 "Interim Financial Reporting". The requirements contained in German Accounting Standard (DRS) No. 6 regarding interim reporting have likewise been fulfilled.

In accordance with IAS 34.20, the present statements include a consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement, a statement of changes in consolidated equity and explanatory notes to the consolidated statements.

The same financial accounting, valuation and computation methods have been applied as in the case of the annual financial statements to December 31, 2011.

The Management Board is satisfied that the impression of the economic situation of the company, its net assets, financial position, earnings situation and cash flow conveyed by the present quarterly financial statements accords with the true facts. This interim report has not undergone an auditors' inspection or statutory audit.

2. Reporting period

The present interim report was prepared to September 30, 2012 for the reporting period from January 1, 2012 to that date.

3. Currency

All figures are stated in euro. Amounts are rounded up to whole euro units.

4. Group of consolidated companies

In addition to the parent company ATOSS Software AG, Munich, the consolidated financial statements to September 30, 2012 also include all subsidiary companies:

ATOSS CSD Software GmbH, Cham, Germany ATOSS Software Ges.mbH, Vienna, Austria ATOSS Software AG, Zurich, Switzerland ATOSS Software S.R.L., Timisoara, Romania

These companies are fully consolidated.

5. Changes in equity

The development in equity is evident from the statement of changes in consolidated equity.

6. Treasury stock

In the first nine months some 49,099 treasury shares were withdrawn, since the primary reason for holding these shares – namely to underpin the convertible bond program – is no longer applicable following the expiry of the program. The shares were withdrawn on the basis of a resolution adopted at the annual general meeting of ATOSS Software AG on May 2, 2011, which authorized the Board of Management to purchase shares in the company. Shares purchased on the basis of this and previous authorizations may be withdrawn without the need for a further resolution by the general meeting to approve the withdrawal thereof (Section 71, Para. 1, No. 8, Sentence 6 of the German Stock Corporation Act).

7. Sales

The company's sales were composed as follows:

EUR	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Software licenses	5,056,281	4,913,558
Software maintenance	9,794,628	9,016,677
Total software	14,850,909	13,930,231
Consulting	6,533,762	6,236,274
Hardware	2,062,875	2,198,652
Others	1,067,867	980,964
Total Sales	24,515,413	23,346,121

The geographic breakdown of sales was as follows:

EUR	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Germany	22,207,059	21,218,431
Austria	1,165,567	1,304,318
Switzerland	565,711	524,592
German-speaking territories in total	23,938,337	23,047,341
Other countries	577,076	298,780
Total Sales	24,515,413	23,346,121

8. Personnel costs

The consolidated personnel costs to September 30, 2012 were composed as follows:

EUR	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Wages and salaries	9,954,610	9,173,180
Social security contributions and expenditure on retirement pensions and welfare	2,072,577	1,972,512
Total personnel costs	12,027,187	11,145,692

9. Other operating income and expenses

In the first nine months of the current financial year the company recorded other operating income in the amount of EUR 49,614 (previous year: EUR 114,387). This essentially comprised income resulting from the liquidation of reserves in the amount of EUR 26,879 (previous year: EUR 6,758) and exchange rate differentials in the amount of EUR 17,010 (previous year: EUR 105,356).

The other operating expenses amounting to EUR 60,453 (previous year: EUR 100,670) essentially related to exchange rate losses.

10. Financial investment income and expenses

In the first nine months of the current financial year the company recorded income in the amount of EUR 1,114,269 (previous year: EUR 1,998,934) from financial investments. This essentially comprised profits from the sale of financial assets in the amount of EUR 477,372 (previous year: EUR 1,775,299), income from write-ups on financial assets in the amount of EUR 389,692 (previous year: EUR 5,086), as well as interest income in the amount of EUR 112,442 (previous year: EUR 143,659) and dividends received in the amount of EUR 134,763 (previous year: EUR 67,334).

The company also recorded expenses amounting as of September 30, 2012 to EUR 276,149 (previous year: EUR 941,741). These comprised financial asset impairments in the amount of EUR 172,419 (previous year: EUR 871,269) resulting from intra-year valuations to September 30, 2012 and interest costs incurred in connection with pension provisions in the amount of EUR 103,729 (previous year: EUR 57,457).

11. Tax charge

Consolidated tax expenses to September 30, 2012 were comprised as follows:

EUR	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Eearnings before taxes (EBT)	6,755,846	6,599,139
Expected tax charge (2012: 32.60%, 2011: 32.98%)	-2,202,406	-2,176,396
Non-deductible operating expenses	-9,907	-13,916
Permanent differences resulting from balance sheet differentials	-56,209	0
Differences in tax rates at consolidated companies	75,386	67,281
Actual Group tax charge	-2,193,136	-2,123,031

12. Earnings per share

The figure for earnings per share is arrived at by dividing the net income in the amount of EUR 4,562,710 by the weighted average number of shares outstanding. Between January 1 and September 30, 2012 there was an average of 3,976,568 shares in circulation. Thus earnings per share for this period amounted to EUR 1.15, in comparison with EUR 1.13, in the first nine months of the preceding year.

In order to calculate diluted earnings per share, the net income must be adjusted to allow for the interest cost relating to convertible bonds in the amount of EUR 0 (previous year: EUR 22). In addition the average number of shares outstanding is increased with the inclusion of shares potentially issued as a result of convertible bonds. Between January 1 and September 30, 2012 there were no convertible bonds in circulation. Thus the diluted earnings per share for this period amounted to EUR 1.15, in comparison with EUR 1.13, the preceding year.

13. Segment reporting

The company has only one uniform business segment which comprises the creation, sale and implementation of software solutions directed towards the efficient deployment of personnel. The individual software solutions comprise:

ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE):

ASES and ASE are working time management and personnel resource planning solutions for customers of all sizes in all industries. These software solutions are generally accompanied by other services covering implementation and training. In addition consulting services are rendered with the object of making meaningful use of the available scope and developing optimum solutions for the efficient deployment of personnel under specific operating conditions and in consideration of works agreements and industry-wide pay deals. The company also sells hardware components for time recording and access control purposes. ASES/ASE software is used in conjunction with all major standard system platforms and databases. Moreover thanks to the extensive facility to define customer-specific parameters these solutions are capable of satisfying even the most sophisticated requirements of customers of all sizes in all industries.

ATOSS Time Control (ATC):

ATC offers a software solution to time and attendance management and personnel resource planning for small and medium-sized customers as well as large but decentrally organized clients. Likewise, in conjunction with ATC, ATOSS offers software implementation and training as well as consulting services. Merchandise including hardware and recording media is also available. ATC software is installed on the Microsoft Windows system platform in association with standard SQL databases and is particularly user-friendly and convenient for small to mediumsized customers as well as large decentralized organizations.

EUR	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Sales
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	22,567,748	21,454,259
ATOSS Time Control (ATC)	1,947,665	1,891,862
Total sales	24,515,413	23,346,121
Operating profit (EBIT)
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	5,609,819	5,049,181
ATOSS Time Control (ATC)	307,907	492,765
Total operating profit (EBIT)	5,917,726	5,541,946

14. Employees

On September 30, 2012 the company had 270 employees (previous year: 259).

	01.01.2012 -30.09.2012	01.01.2011 -30.09.2011
Development	118	117
Consulting	72	68
Sales and Marketing	38	37
Administration	42	37
Total	270	259

15. Board of Management

The members of the Board of Management are:

Andreas F.J. Obereder	Chief Executive Officer
Christof Leiber	Executive Board

16. Supervisory Board

The members of the Supervisory Board are:

Peter Kirn	Chairman
Rolf Baron Vielhauer von Hohenhau	Deputy Chairman
Richard Hauser	Member of the Supervisory Board

17. Board member shareholdings

On the reporting date of September 30, 2012 board members held the following numbers of ATOSS shares:

EUR	30.09.2012	30.06.2012	31.03.2012	31.12.2011	30.09.2011
Andreas F.J. Obereder	1,988,285	1,988,285	1,988,285	1,981,184	1,981,184
Peter Kirn	14,760	14,760	14,760	19,760	19,760

18. Notifiable participating interests

In the first nine months of financial year 2012 the company received the following notifications regarding changes in participating interests pursuant to sections 21 ff. of the German Securities Trading Act:

On January 30, 2012 the share in voting rights held by Mr. Andreas Obereder, Germany, exceeded 50 percent of nominal capital. His holding at that time amounted to 50.0000025 percent.

On January 27, 2012 the share in voting rights held by MainFirst SICAV, Luxembourg, exceeded 5 percent of nominal capital. Its holding at that time amounted to 5.06 percent.

On March 13, 2012 the threshold of 3 percent of voting rights was exceeded with the purchase of shares by Investmentaktiengesellschaft für langfristige Investoren TGV, Germany. Its holding at that time amounted to 3.93 percent. On March 15, 2012 the proportion of 5 percent of voting rights was exceeded with the purchase of further shares by this company whose holding at this time amounted to 5.83 percent.

On March 09, 2012 Universal Investment, Germany, reduced its holding below the voting rights threshold of 3 percent of nominal capital through the sale of shares. Its holding at that time amounted to 2.32 percent.

On March 20, 2012 the threshold of 3 percent of voting rights was exceeded with the purchase of shares by IFM Independent Fund Management AG, Liechtenstein. Its holding at that time amounted to 3.27 percent.

19. Business transactions with closely related persons

The wife of the Chief Executive Officer provides services to the company. In the first nine months of the financial year 2012 the value of these services amounted to EUR 4,056 (previous year: EUR 4,316).

The company is satisfied that the terms agreed for these transactions are standard market terms.

20. Events after the reporting period

Within the defined investment strategy the company has acquired physical gold in the amount of EUR 5.0 million in October 2012.

There have been no further reportable events of particular significance since September 30, 2012.

Declaration by the Legal Representatives

We hereby give an assurance to the best of our knowledge and belief that in accordance with the applicable interim reporting standards these interim consolidated financial statements convey an impression of the net assets, financial position and earnings situation of the Group which accords with the true facts; and that the development in business including the results and the situation of the Group are so described in the interim consolidated management report as to convey an impression which likewise accords with the true facts; and that the essential opportunities and risks associated with the anticipated development of the Group in the remainder of the financial year are so described.

Munich, November 15, 2012

Andreas F.J. Obereder Christof Leiber Chief Executive Officer Member of the Board

of Management

Declaration by the Legal Representatives Disclaimer

This report contains forward-looking statements that are based on the conviction of the Management Board of ATOSS Software AG and reflect current assumptions and estimations. These forward-looking statements are subject to risks and uncertainties. Many facts that cannot currently be predicted may cause the actual performance and earnings of ATOSS Software AG to develop in a different manner. This could for example include the non-acceptance of newly introduced products or services, changes in the general economic and business climate, a failure to achieve efficiency and cost-reduction targets or changes in business strategy.

The Management Board is firmly convinced that the expectations embodied in these forwardlooking statements are sound and realistic. Should however the above-mentioned or other unforeseeable risks materialize, ATOSS Software AG cannot guarantee that the expressed expectations will prove to be correct.

Corporate Calendar

31.01.2013 Press release announcing preliminary results for 2012

• 12.03.2013 Publication of the annual report for 2012
• 12.03.2013 Balance sheet press conference
• 22.04.2013 Press release announcing three months' statement
• 26.04.2013 Annual General Meeting
• 13.05.2013 Publication three months' statement
• 22.07.2013 Press release announcing six months' statement
• 12.08.2013 Publication six months' statement
• 21.10.2013 Press release announcing nine months' statement
• 18.11.2013 Publication nine months' statement

Imprint

Responsible

ATOSS Software AG Am Moosfeld 3 81829 Munich T +49 89 4 27 71 0 F +49 89 4 27 71 100 www.atoss.com

INVESTOR RELATIONS

ATOSS Software AG Investor Relations Christof Leiber T +49 89 4 27 71 0 F +49 89 4 27 71 100 Christof.Leiber@atoss.com

Other Offices

Düsseldorf T +49 2150 9 65 0

Frankfurt T +49 69 13 82 43 0

Hamburg T +49 40 27 81 63 0

Stuttgart T +49 7 11 7 28 73 200

Subsidiaries

Germany

ATOSS CSD Software GmbH, Cham T +49 99 71 85 18 0

Austria

ATOSS Software Ges.mbH, Vienna T +43 1 7 17 28 334

Switzerland

ATOSS Software AG, Zurich T +41 44 3 08 39 56

Romania

ATOSS Software SRL, Timisoara T +40 356 710 170

ATOSS Software AG

Am Moosfeld 3 81829 München T +49 89 4 27 71 0 F +49 89 4 27 71 100

info@atoss.com www.atoss.com