Alviso, CA (PressExposure) April 28, 2010 -- Software AG (Frankfurt TecDAX: SOW) is off to a strong start in 2010, continuing on the growth path it began in 2003. First-quarter total revenue was posted at €250.3 million, a 51 percent increase year-on-year. In the same period, product revenue grew 20 percent to €146.7 million. Free cash flow, which had been climbing progressively over the past few quarters, dynamically rose by 39 percent in the first quarter. This higher Free Cash Flow expanded the Company's capability to further drive growth. The slight upswing in IT demand that became apparent early in the year had a positive impact on the first quarter. The Company expects an increased volume of large-scale projects in the Process Innovation division and confirms its outlook for the fiscal year.
During the first quarter 2010 In the U.S., Software AG gained major new customers and projects in the telecommunications, manufacturing, financial services, retail and insurance industries, as well as in the state and local government illustrating that the demand for IT services is strong as companies seek innovative and cost effective ways to improve their operations.
"The first quarter was indeed triumphant," said Dean Mericka, President of Sales, Americas, Software AG. "We saw a 15 percent growth that reassured us that companies are focused on aligning how they do business with IT solutions. Now, with the IDS Scheer suite of products, we have a powerhouse of solutions that customers are noticing and taking advantage of. We are already winning joint projects with both ARIS and webMethods products."
Integration of IDS Scheer and Software AG progressing as planned
Operational integration of IDS Scheer began in February 2010 in the central administrative departments and will continue at the foreign subsidiaries. To further accelerate the process, the merger of the companies is being prepared. To that end, IDS Scheer AG shares will be exchanged for Software AG shares. The exchange rate will be based on a value assessment of the five-year plans of both companies. A preliminary value per share was calculated at €138.96 for a Software AG share and €16.74 per an IDS Scheer share.
Outlook
The operational results showed the normal seasonal effects. In light of the persistently difficult economic climate, this can be considered a very positive indication of upcoming business development. The merger of IDS Scheer and Software AG in both the product and consulting businesses will generate cost benefits and competitive advantages. The Company therefore confirms the outlook for fiscal year 2010 which was published in February, with total revenue growth between 25 and 30 percent and product revenue growth between 12 and 15 percent, at constant currency rates. Accordingly, an increase in net income and earnings per share is expected between 8 and 12 percent.
Key Figures
in € million... Q1 2010...Q1 2009...Change
Group revenue 250.3 165.3 +51% - Product revenue 146.7 122.5 +20% - Licensing revenues 61.2 49.3 +24% - Maintenance revenues 85.4 73.2 +17% EBIT 46.6 38.1 +22% Net income 28.0 25.6 +9% Earnings per share (in €) 0.98 0.90 +10% Free cash flow 59.8 43.0 +39%
Total employees 5,936 3,640 - Employees in Germany 2,185 851