Wednesday, 02 February 2011 08:22

Software AG reports record results for fiscal year 2010

By Software AG

Software AG (Frankfurt TecDAX: SOW) has announced that Group revenues in fiscal year 2010 hit a record high of €1.12 billion, exceeding the target set in 2007 and a year earlier than originally planned. The reported revenue increase of 32% (26% at constant currency) also benefitted from the weakness of the euro.

Product revenues increased year on year by 20% to €696.8 million. Licensing revenue climbed 21% to €327.4 million and Maintenance revenue increased by 19% to €369.4 million.

Company earnings reached a new high with EBIT growth of 23% to €268.6 million and net income grew 25%, up to €176.5 million.

In Australia, Software AG recorded very strong year-on-year growth, with total revenue up 22% versus 2009. Growth was achieved across all areas of the business, with licence revenues increasing by 64%, maintenance by 8% and services by 8%.

The Australian operation was also strongly profitable, with an EBIT margin above that of the company average.

The company's merger with Business Process Management specialist IDS Scheer AG saw the creation of a new Business Process Excellence (BPE) business line, encompassing both the webMethods (Software AG) and ARIS (IDS Scheer) integration and process software products. Revenue from this business line achieved revenue growth of 34%, up to €499.2 million from €372.3 million in fiscal year 2009.

At €420.0 million, revenues for the Enterprise Transaction Systems (Adabas, Natural) business line were six percent higher than in the same quarter of the previous year (€396.0 million).

The results confirmed Software AG's growth strategy since its acquisition of IDS Scheer AG in August 2009, to position itself as an innovative market leader in the IT growth market of process software. A range of large-scale projects and an increase in new customers resulted in the new BPE business line delivering an increased contribution to income, while economies of scale, cross-selling successes and increased sales efficiency showed a positive impact on earnings. The company's further growth will be determined by the BPE products' success on the market.

'Our significantly improved market position and the positive reaction from customers have already made this a successful merger,' said Karl-Heinz Streibich, CEO of Software AG. 'With the complete integration of our ARIS and webMethods product suites we will offer a unique product portfolio. I am therefore convinced that Software AG's success story will continue.'

Revenue and earnings growth expected in 2011

In fiscal year 2011, Software AG is expecting continued high interest in its new products that integrate different IT systems and business processes. Accordingly, revenue growth of 10 to 15 percent is expected for the BPE business line. The full integration of ARIS and webMethods, to be presented at CeBIT 2011, enables unprecedented efficiency in the development and implementation of process solutions. This innovation should contribute to sales momentum over the course of the year. Overall, Software AG expects total revenue growth of five to seven per cent, at constant currency. As further synergies through the merger with IDS Scheer AG are realised, Software AG expects a considerable increase of 10 to 15 per cent over the previous year in net income.


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