Software AG (Frankfurt TecDAX: SOW) today announced
significantly increased customer demand for its Business Process
Excellence (BPE) products with license revenue up by 46 percent to
€45.6 million in the second quarter of 2012 (2011: €31.3 million).
The company’s Enterprise Transaction Systems (ETS) business line
reported license revenue growth of 20 percent to €30.1 million
(2011: €25.1 million). With ETS maintenance stable at €47.6 million
and BPE maintenance significantly up to €48.1 million, Software AG
is reporting a total product revenue increase of 16 percent to
€175.5 million (2011: €151.5 million). Software AG also reported
total revenue of €258.6 million (2011: €257.1 million).
Group revenue for Q2 2012
Software AG cited significantly increasing demand across its
product portfolio with total license sales up by 32 percent to
€76.0 million (2011: €57.7 million). The BPE license growth was
primarily driven by dynamic development in Europe, South Africa and
the Americas. The North America organization benefited from the
implementation of reorganizational measures and is back to double
digit BPE license growth. A further major contributor to the
revenue growth was Software AG’s subsidiary Terracotta, based in
Silicon Valley, and its technology for the management of Big
Data.
Software AG CEO Karl-Heinz Streibich commented on the results:
“It is clear that there is a growing global demand for integration
and process management software that increases business efficiency
and competitiveness. Business Process Excellence is playing a
strategic role in customers achieving their growth targets.”
Software AG generated services revenues of €82.7 million (2011:
€104.8 million) in the second quarter. Thereof, the SAP consulting
business delivered €27.3 million (2011: €40.2 million), as Software
AG continued to exit from unprofitable markets. The remaining €55.4
million (2011: €64.6 million) was generated in the BPE and ETS
services area. Whereas ETS service revenue showed a modest
increase, BPE services revenues were down due to the lower level of
BPE license sales in previous quarters.
Group results for Q2 2012
Total Group turnover was slightly up to €258.6 million (2011:
€257.1 million). The company reported an EBIT of €57.1 million and
a margin of 22.1 percent (€58.9 million and 22.9 percent in Q2,
2011). Software AG invested in BPE sales and marketing in the US
and other key markets. Investment in Research and Development is
also higher than in the previous year. As a result, with the tax
rate unchanged, net income was €37.5 million for the quarter (2011:
€38.7 million)
Arnd Zinnhardt, Chief Financial Officer of Software AG, added:
"Our investment in sales and marketing is driving sustainable
growth and showing the first successes in North America. Therefore,
we will continue our investment in sales and marketing activities
in the coming quarters."
First half of 2012
Product revenue for the first six months also grew, by 7 percent
to €337.1 million (2011: €315.8 million). Revenues from the
services business during the reporting period were €175.4 million
(2011: €211.1 million). Group revenue amounted to €513.2 million
(2011: €529.7 million) during the first six months of the current
fiscal year.
The EBIT in the first half of 2012, reflecting increased
investments in BPE business development, was €111.9 million (2011:
€119.1 million). The EBIT margin was 21.8 percent compared to 22.5
in 2011. Net income was €73.3 million (2011: €78.7 million). Cash
and cash equivalents increased by €53.5 million to €270.0 million,
and the equity ratio climbed to 58 percent (2011: 49 percent).
Business Lines Development
The Business Process Excellence business line, which includes
the product groups webMethods (IT integration), ARIS (business
process software) and Terracotta products (Big Data), achieved
total revenue of €256.6 million in the first half of 2012, an
increase of 4 percent (2011: €245.6 million). Product revenues for
Business Process Excellence grew by 14 percent to €174.3 million
(2011: €152.3 million. Service revenues were €82.1 million (2011:
92.4 million) in the first half of 2012.
The Enterprise Transaction Systems business line
(high-transaction database software) was up in the first half of
2012 with reported revenue of €189.3 million (2011: €186.4
million). The ETS product revenue rose to €154.0 million (2011:
€152.3 million). This increase is primarily due to increased demand
in the EMEA region.
The SAP consulting business line contributed €67.3 million
(2011: €97.7 million) to Software AG’s revenues in the first six
months of this fiscal year.
More Employees in Research & Development
As of June 30, 2012, Software AG had 5,461 (2011: 5,478)
full-time employees, of which 896 (2011: 845) work in Research and
Development (R&D). Employees in Germany numbered 1,803 (2011:
1,946).
Outlook for fiscal 2012: the forecast for BPE and EBIT margin
confirmed
Looking at the individual product business lines: The Business
Process Excellence forecast remains unchanged at plus five to plus
fifteen percent while Enterprise Transaction Systems has been
increased to minus six to minus three percent (the original
forecast corridor was minus twelve to minus seven percent).
Software AG is forecasting total product revenue growth of plus two
to plus seven percent. The EBIT margin range remains at 23 percent
to 24.5 percent. All revenue growth forecasts are at constant
currency rates.
About Software AG
Software AG is the global leader in Business Process Excellence.
Our 40 years of innovation include the invention of the first
high-performance transactional database, Adabas; the first business
process analysis platform, ARIS; and the first B2B server and
SOA-based integration platform, webMethods.
We offer our customers a variety of end-to-end solutions
delivering low Total-Cost-of-Ownership and high ease of use. Our
industry-leading brands, ARIS, webMethods, Adabas, Natural,
CentraSite, Terracotta and IDS Scheer Consulting, represent a
unique portfolio encompassing: process strategy, design,
integration and control; SOA-based integration and data management;
process-driven SAP implementation; and strategic process consulting
and services.
Software AG had revenues of €1.1 billion in 2011 and has more
than 5,500 employees serving about 10,000 enterprise and public
institution customers across 70 countries. Our comprehensive
software and services solutions allow companies to continuously
achieve their business results faster. The company is headquartered
in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN
DE 0003304002 / SOW).
Software AG - Get There Faster
Detailed press information about Software AG including a picture
and multimedia database are available under:
www.softwareag.com/press
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