Software AG: Results And Licensing Revenues Exceed Market Expectations In The 3rd Quarter 2012

Online, October 17, 2012 (Newswire.com) - Software AG (Frankfurt TecDAX: SOW) today pre-announced its key figures for the 3rd Quarter, 2012 after an initial consolidation of its financial numbers (all figures preliminary, rounded and subject to change).

Development of license revenues
Software AG (http://www.softwareag.com) reported software license revenues, the key growth indicator, of around €81 million in the third quarter. This represents an increase of ca. 8 percent over the very strong previous year's third quarter (€74.7 million) and significantly exceeds market expectations.

In Business Process Excellence (BPE), license sales rose by 20 percent to ca. €50 million (previous year: €41.7 million). This positive development was based on all regions reporting double-digit revenue growth. The sales offensive in North America, in which the company has been investing since the beginning of the year, delivered strong growth for the second consecutive quarter. Europe also continued its positive development. Moreover, the "Big Data" products from Terracotta continued their dynamic growth and contributed some €5 million license revenue in the 3rd quarter, repeating the record sales of the 2nd quarter record.

In the traditional Enterprise Transaction Services (ETS) division, license revenue was approximately €30 million, almost at the high level of 2011 (€31.6 million), contributing to the further stabilization of the classic database business.

Development of maintenance and services revenues
Group maintenance revenue increased in the 3rd Quarter of 2012 by ca. 4 percent to about €98 million (previous year: €94.2 million), with both the BPE and ETS divisions contributing approximately €47 million each. Group services revenue in the quarter amounted to approximately €78 million (previous year: €105.2 million) of which one third was contributed by IDS Scheer Consulting, implementing SAP solutions. The background to this sales decline is the concentration of the consulting business on process-driven SAP solutions in selected core markets.

Total revenue and income for the 3rd Quarter 2012
Due to reduced services revenues, total Group sales amounted to €257 million (€274.6 million in Q3, 2011) but reached the high level of the seasonally stronger 2nd quarter of 2012 (€258.6 million). The operating result (EBIT according to IFRS) was €60 to €62 million, above the level of the previous quarter of the current year (€57.1 million). Due to the currently higher expenses based on the development and expansion of the marketing and sales organization for the new growth products, particularly in the U.S., and this year's charges arising from the focus of the consulting business, the operating profit was below the extraordinarily strong previous year's quarter (€72.0 million).

Development of the first 9-months 2012
Dynamic BPE license sales was approximately €131 million (previous year: €112.1 million) in the first 9 months. This is an increase of about 17 percent. The ETS business 9-month license revenues were slightly above the previous year at €89 million (€87.2 million). Product revenues (licenses and maintenance) at the group level climbed in the 9-month period by about 6 per cent to around €515 million (previous year €484.7 million). Marked by the consolidation of the consulting business, sales and earnings in the services business were below the previous year's. Accordingly, consolidated sales in the first 9-months were €770 million (previous year €804.3 million). The operating result was in the range of €172 to €174 million (previous year: €190 million).

Outlook
The dynamic growth in license sales, driven by the innovative BPE and Terracotta products and strengthened by stable ETS development positively impacted the first 9 months of fiscal 2012 and is expected to continue in the 4th quarter. Therefore Software AG confirms its forecast for the full year. The company will provide refined guidance with the full disclosure of its quarterly results on 30 October 2012.