Mediaboss Marketing

RESTON, Va.--(BUSINESS WIRE)--

Software AG (Frankfurt TecDAX: SOW) reported license revenue growth of 19 percent (at constant currency) in its largest business line, Business Process Excellence (BPE), in the first quarter of the current fiscal year. These results, clearly outperforming the market, illustrate that the company's expansion of sales, begun last year, continue to have a positive impact. In addition to its quarterly results, Software AG announced its acquisition of LongJump, a U.S. based firm headquartered in California. LongJump offers a cloud-based software platform that enables customers to independently develop enterprise applications. In order to further fuel dynamic growth, Software AG plans to drive its growth initiatives with targeted investments in the BPE business line during the course of the current fiscal year. The company's full-year forecast for 2013 has been confirmed.

Software AG CEO Karl-Heinz Streibich stated, "Our first-quarter results confirm that we are exactly on track with our strategic growth initiatives. There is unprecedented demand for products around the four technological megatrends: Big Data, Cloud, Mobile and Social Collaboration. Our BPE offering addresses precisely what our customers need and helps them successfully implement their digitization strategies. Additionally, we are enhancing organic growth through selective acquisitions."

Business line development

The BPE business line made the largest contribution to total revenue with growth of about 14 percent (at constant currency) to total 90.3 million (2012: 80.6 million). The business line's license revenue went up 19 percent (at constant currency) to 41.9 million (2012: 35.7 million). With these results, the company clearly outperformed its competitors which should lead to an increase of its market share in the period under review. This dynamic development verifies the impact of strategic growth measuresincluding the expansion of the company's sales force in specific marketsintroduced last year. Based on its project pipeline, Software AG is optimistic about upcoming quarters and expects BPE license revenue to continue to rise over the course of the year.

The traditional Enterprise Transaction Systems (ETS) database business generated 64.5 million (2012: 76.6 million) in the first quarter. The expected decline in the current year is due to a weaker cycle of contract renewals. Because the ETS products Adabas-Natural are a key technology to a large customer base, Software AG anticipates the division's performance to improve during the second half of 2013.

The Consulting business line, which comprised the services of BPE, ETS and IDS Scheer Consulting for the first time this quarter, posted revenue at 70.1 million (2012: 97.4 million). As part of the realignment of its SAP consulting business, Software AG continues to withdraw from unprofitable markets and to focus on process optimization for SAP applications in the German speaking region. The sale of its North American SAP-related service activities in January 2013 was a major step in this direction.

Software AG's total revenue for the first quarter of 2013 was 224.9 million (2012: 254.6 million) due to decreased consulting revenue. Revenue from Software AG's own products (BPE + ETS product revenue) at constant currency was slightly above the figure of 156.9 million from the same quarter last year. Product sales represented about 70 percent (2012:63 percent) of total revenue. The revenue mix therefore further improved in favor of growth-driving, high-margin license and maintenance revenue.

Earnings

Due to the planned increase in sales and marketing expenses, at 72.8 million (2012: 59.3 million), for addressing new high-potential markets, EBIT was 41.6 million (2012: 54.8 million). Net income after taxes totaled 27.2 million (2012: 35.9 million).

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Software AG Achieves Double-Digit Growth in Largest Business Line