Softing AG — Interim / Quarterly Report 2007

May 9, 2007

Quartely Report 1/2007

Sales increase by 19 percent, earnings positive at EUR 0.5 million

Sales increase by 19 percent, earnings positive at EUR 0.5 million

Dear shareholders, employees, partners and friends of Softing AG,

Softing looked good in the first quarter of 2007. The results of our renewal efforts over the past years are clearly visible. This was actually one of the best first quarters in Softing's more than 25-year history. We achieved an operating profit of EUR 0.5 million and net income of EUR 0.3 million in the first three months, making this a promising

start to the new year.

All of Softing's key figures improved significantly. The Group's incoming orders – an important early indicator – rose by over 20 percent to reach EUR 7.0 million (previous year: EUR 5.7 million). Sales increased by 19 percent from EUR 5.4 million to EUR 6.4 million. Earnings jumped EUR 0.8 million, boosting EBIT to a very gratifying EUR 0.5 million (previous year: EUR –0.3 million), while net income came to EUR 0.3 million (previous year: EUR –0.2 million). Softing's orders on hand were also up a good 13 percent, amounting to a notable EUR 5.2 million (EUR 4.6 million as of December 31, 2006).

The figures from the first three months make us confident that we can reach our goals for 2007. Through organic growth, we want to achieve sales of around EUR 25 million and EBIT of over EUR 1.5 million.

Our participation in this year's "Hannover Messe" industrial trade fair in April was another great success. Numerous conversations and negotiations have confirmed that demand continues to grow for our industrial automation products and services. Our new products give us an outstanding position in this field. The positive economic forecasts and growth opportunities in the automation and process industry will also strengthen this development.

Last year's realignment of Automotive Electronics is beginning to bear fruit. Sales were up 16 percent here, while earnings rose by EUR 0.5 million. This means Automotive Electronics is once again making a positive contribution to Group earnings. The division is clearly back on the road to success. Its streamlined organization, total customer focus and highest standards of product quality will help Automotive Electronics grow profitably.

We are convinced that Softing's progress in 2007 will have a greater impact on our share price than before. The first quarter has given us, the Executive Board and employees, the incentive to continue implementing our ambitious plans. We hope it gives you, our valued shareholders, the incentive to accompany us further along this promising journey.

Sincerely,

Dr. Wolfgang Trier

Stock Price – Directors' Holdings Financial Calendar

Directors' Holdings as of 03/31/2007

Boards		Number of shares			Number of options
	As of	As of			As of
	03/31/2007	12/31/2006		03/31/2007		12/31/2006
Executive Board
Dr. Trier	110,000	110,000		37,200		37,200
Dr. Siedentop	–	–		–		–
Supervisory Board
Dr. Schiessl	–	–		–		–
Mr. Butscher	–	–		–		–
Mr. Kratzer	–	–		–		–

Financial Calender

Quarterly Report 1/2007	05/29/2007
Quarterly Report 2/2007	08/14/2007
Annual Shareholders' Meeting in Munich	08/24/2007
Quarterly Report 3/2007	11/14/2007

Contact: Softing AG

Investor Relations Phone: +49 (89) 4 56 56-0 Fax: +49 (89) 4 56 56-492 InvestorRelations@softing.com www.softing.com

Consolidated Balance Sheet

According to IFRS as of March 31, 2007, unaudited

Quarterly		Financial
report		statements
03/31/2007		12/31/2006
EUR		EUR
2,327,702		2,108,413
631,625		631,625
4,743,727		4,659,500
1,639,573		1,595,890
299,228		343,234
9,641,855		9,338,662
592,394		538,000
3,765,131		3,663,395
2,351,125		2,351,125
423		0
3,070,234		3,059,258
9,779,307		9,611,778
		18,950,440
	19,421,162

Liabilities and shareholders' equity
Trade accounts payable	780,856	718,038
Provisions	142,610	142,610
Deferred income and other current liabilities	2,464,838	2,712,497
Total current liabilities	3,388,304	3,573,145
Liabilities under long-term construction contracts	303,599	162,298
Deferred tax liabilities	1,444,083	1,281,129
Pension provisions	1,164,425	1,138,073
Other non-current liabilities	353,509	348,728
Total non-current liabilities	3,265,616	2,930,228
Share capital	5,599,998	5,599,998
Capital reserves	1,682,707	1,682,707
Treasury shares	– 273,375	0
Accumulated profits (incl. retained earnings)	5,757,912	5,164,362
Total shareholders' equity	12,767,242	12,447,067
Total liabilities and shareholders' equity	19,421,162	18,950,440

Consolidated Income Statement

According to IFRS as of March 31, 2007, unaudited

	Quarterly report	Quarterly report
	I/ 2007	I/2006
	01/01/2007	01/01/2006
	– 03/31/2007	– 03/31/2006
	EUR	EUR
Revenue	6,384,436	5,350,358
Other operating income	69,216	97,198
Other own work capitalized	652,097	594,007
Cost of purchased materials and services	– 1,546,497	– 1,241,830
Staff costs	– 3,450,574	– 3,331,097
Depreciation and amortization	– 689,400	– 818,376
Other operating expenses	– 918,317	– 945,174
Operating income/loss	500,961	– 294,914
Interest income and expense	– 25,069	– 40,821
Result before income taxes	475,892	– 335,735
Income tax	– 143,403	97,386
Other taxes	– 13,379	– 7,652
Net income/loss	319,110	– 246,001
Earnings per share (basic)	0.06	– 0.04
Earnings per share (diluted)	0.06	– 0.04
Average number of shares outstanding (basic)	5,599,998	5,499,998
Average number of shares outstanding (diluted)	5,621,762	5,524,502

Consolidated Cash Flow Statement

According to IFRS as of March 31, 2007, unaudited

		Quarterly report	Quarterly report
		I/ 2007	I/2006
		01/01/2007	01/01/2006
		– 03/31/2007	– 03/31/2006
		TEUR	TEUR
	Cash flows from operating activities
	Net profit/loss for the period	319	– 246
+	Depreciation/amortization	689	818
	+/– Increase/decrease in provisions	189	– 65
–	Change in net working capital	– 133	– 553
	Net cash provided by operating activities	1,064	– 46
	Cash flow from investing actitivies
–	Payments made for investments in self-produced intangible assets	– 710	– 703
–	Payments made for investments in other intangible assets and
	in property, plant and equipment	– 134	– 73
=	Net cash used in investing activities	– 844	– 776
	Increase/decrease in cash and cash equivalents	220	– 822
	Cash and cash equivalents at beginning of period	2,740	4,729
	Cash and cash equivalents at end of period	2,960	3,907

Changes in Shareholders' Equity

01/01 – 03/31/2007

Thsd. EUR	Share capital	Capital reserves	Retained earnings	Accumulated profits	Total
Balance as of December 31, 2006 Valuation of financial instruments	5,600	1,683	6,526	– 1,362	12,447
Currency translation				1	1
Net income 2007				319	319
Balance as of March 31, 2007	5,600	1,683	6,526	– 1,042	12,767

01/01 – 03/31/2006

Thsd. EUR	Share capital	Capital reserves	Retained earnings	Accumulated profits	Total
Balance as of December 31, 2005	5,600	1,683	6,415	176	13,874
Valuation of financial instruments			– 18		– 18
Currency translation			4		4
Net income/loss 2006				– 246	– 246
Balance as of March 31, 2006	5,600	1,683	6,401	– 70	13,614

Notes to the Consolidated Financial Statements for Q1/2007

This quarterly report was prepared using the same accounting policies as in financial year 2006.

The German economy showed considerable growth in early 2007. The five leading economic research institutes forecast economic growth of 2.4 percent for the remainder of the year. We therefore expect Softing's sales to increase further.

Investments in self-constructed intangible assets amounted to EUR 0.7 million in the first three months of 2007 (2006: EUR 0.7 million).

As of 03/31/2007, orders on hand in the Group totaled EUR 5.2 million (12/31/2006: EUR 4.6 million).

As of 03/31/2007, the Group had 205 employees (2006: 202). During the reporting period, no stock options were issued to employees.

On January 29, 2007, Dr. Manfred Patz left the Supervisory Board, and on Febuary 1, Mr. Andreas Kratzer was appointed to the Supervisory Board.

Segment Reporting

As of March 31, 2007

	Quarterly report I/ 2007	Quarterly report I/2006
	01/01/2007	01/01/2006
	– 03/31/2007	– 03/31/2006
	TEUR	TEUR
Automotive Electronics
Revenue	2,992	2,578
Segment result (EBIT)	67	– 439
Depreciation/amortization	347	507
Segment assets	6,828	8,494
Segment liabilities	2,511	2,977
Capital expenditure (not including long-term investments)	405	463
Industrial Automation
Revenue	3,392	2,772
Segment result (EBIT)	434	144
Depreciation/amortization	342	311
Segment assets	6,303	5,574
Segment liabilities	2,699	2,960
Capital expenditure (not including long-term investments)	397	298
Not distributed
Revenue	–	–
Segment result (EBIT)	–	–
Depreciation/amortization	–	–
Segment assets	6,290	7,323
Segment liabilities	1,444	2,146
Capital expenditure (not including long-term investments)	42	16
Total
Revenue	6,384	5,350
Segment result (EBIT)	501	– 295
Depreciation/amortization	689	818
Segment assets	19,421	21,391
Segment liabilities	6,654	8,083
Capital expenditure (not including long-term investments)	844	777

The division into business segments in accordance with IAS 14 is shown in the above table