EANS-Adhoc: Software AG - The Integration and Process Software Business (BPE) Continues to Grow in Q3 2011

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ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
adhoc with the aim of a Europe-wide distribution. The issuer is solely
responsible for the content of this announcement.
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quarterly report

18.10.2011

• BPE license sales grew by 33 percent in Q3, 2011 (37 percent at
constant currency) • BPE product sales were up by 17 percent (21
percent at constant currency) • Earnings turnaround in the IDS Scheer
Consulting division • Full-year forecast: Product revenue and
earnings growth confirmed

Darmstadt, October 18, 2011 - After an initial consolidation of the
financial results for the third quarter 2011, Software AG (Frankfurt
TecDAX: SOW) accounted for license growth in Business Process
Excellence (BPE) of 37 percent (at constant currency) to EUR42
million (previous year EUR 31.4 million). Growth in the product
business (license and maintenance) was 21 percent, at constant
currency rates, amounting to EUR84 million (previous year EUR72.1
million). The largest increases in sales were reported in North
America, Germany, Australia and South Africa.

Sales of software licenses across all business areas improved by 7
percent to EUR75 million (previous year EUR69.6 million) or 11
percent at constant currency. The strong growth in BPE license
revenue more than offsets the expected decline to EUR32 million
(previous year EUR36.6 million) in Enterprise Transaction Systems
(ETS) sales. With total maintenance revenues stable, Group product
revenue (licenses and maintenance) increased to EUR169 million
(previous year EUR166.2 million), an increase of 5 percent at
constant currency.

Software AG generated services revenues of EUR105 million (previous
year EUR108.3 million) in the third quarter. Of this total, EUR63
million (previous year EUR60.5 million) were generated in the BPE and
ETS services area and EUR43 million (previous year EUR47.8 million)
by IDS Scheer Consulting (IDS). Software AG´s new services management
team is focused on increasing profitability accepting slower revenue
growth during this transition phase.

Total Group turnover was EUR275 million (previous year EUR275.3
million), an increase of around 2 percent at constant currency rates.
The continuing strength of the Euro in the third quarter resulted in
lower stated revenues of approx. EUR7 million as foreign currency
sales are converted into Euro. Through a stronger focus on
profitability in the services business, IDS Scheer Consulting
successfully managed a turnaround in earnings in the third quarter
and will significantly increase its contribution to results in the
second half of the year.

Overall in the third quarter, the Software AG group achieved an
operating profit (EBIT) of approx. EUR71 to EUR73 million (previous
year EUR69.1 million).

Software AG considers itself to be well on the way to achieving its
full year growth targets in its core business, the sale of software
licenses and maintenance. The ETS product revenue for the first nine
months is 1 percent under the 2010 year level. This performance
confirms the forecast for the full year 2011 of ETS product revenue
within plus or minus 2 percent of the 2010 level. After nine months
the BPE business division has delivered 10 percent revenue growth at
constant currency rates. There is strong customer interest in
integration and process software and this will continue to generate
double digit growth, despite the macro-economic uncertainties.
Therefore, the company confirms its product revenue growth target for
2011 of 10 to 15 percent at constant currency.

In the IDS Scheer Consulting business division the company will
remain focused on profitable projects. For the full fiscal year, this
will have two consequences: first an expected increase in the EBIT
margin of around 200 basis points to approx. 26 percent (previous
year 24.0%); and second a total Group revenue growth of between 2 to
5 percent at constant currency. The profit after tax will therefore
be 10 to 15 percent over the EUR175.6 million reported in 2010.

The detailed financial results will be published by Software AG on
October 27, 2011.

Further inquiry note:
Robert Adolph
Manager Investor Relations
Tel.: +49 (6151) 92 1237
E-Mail: robert.adolph@softwareag.com

end of announcement euro adhoc
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issuer: Software AG
Uhlandstr. 12
D-64297 Darmstadt
phone: +49 (0)6151 92 1899
FAX: +49 (0) 6151 92 1933
mail: investor.relations@softwareag.com
WWW: http://www.softwareag.com
sector: Software
ISIN: DE0003304002
indexes: TecDAX, CDAX, HDAX, Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, Hannover
language: English