EANS-Adhoc: Software AG
Weak sales in the US leads to drop in revenue in the
fourth quarter of 2011 (full-year revenue remains stable)
-------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 10.01.2012 Business Process Excellence (BPE) division: strong growth in Europe offset lower revenue in the U.S. Enterprise Transactions Systems (ETS) division: overall customer reluctance to invest dampened efforts to offset the expected structural reduction of sales in Brazil Q4 total revenue was about 8 to 10 percent below 2010 (at constant currency rates) Profit after tax in the region of EUR45 to EUR50 million for the quarter is expected Darmstadt, Germany, January 10, 2012, Software AG (Frankfurt TecDAX: SOW), after an initial consolidation of the revenue and earnings estimates of the subsidiaries for the fourth quarter 2011, announced total revenues of approximately EUR290 to EUR295 million (previous year EUR326.7 million). At constant currency rates, total fourth quarter revenue was about 8 to 10 percent below the previous year´s figure and fourth quarter license revenue of about EUR90 to EUR95 million (previous year EUR127.7), about 25 to 27 percent below. In the fourth quarter, the growth segment BPE (innovative software for process integration and automation) license revenue, in both DACH and in the EMEA region increased by about 40 percent. This success was offset by a significant decline in the U.S., so that the total revenue of the division of EUR145 to EUR148 million remained at the 2010 level, at constant currency rates. The usual seasonal boost (budget flush) in ETS sales in the fourth quarter did not materialize. Presumably, the predicted economic slowdown meant that customers residual budget, in contrast to normal years, was not invested in capacity expansion. Therefore, the stable ETS revenues in Europe and the increased ETS revenues in the U.S. did not fully compensate for the expected structural effects on sales in Brazil (the transfer of local customers to the direct sale model was completed in 2010). As a result, total ETS revenue in the fourth quarter of about EUR100 to EUR103 million (previous year EUR133.2 million) did not match the stable development of the first nine months. ETS product revenue of EUR83 to EUR85 million (previous year EUR115.9) was further under last year's fourth quarter high value than planned, a quarter also characterized by exceptionally large contracts. The lower license revenues are not fully reflected in Group earnings due to the established company revenue-related compensation schemes. Software AG therefore expects profit after tax of EUR45 to EUR50 million for the fourth quarter. For the full year 2011, Software AG achieved a turnover of nearly EUR1.1 billion, the same level as 2010, at constant currency rates. BPE product revenue (licenses and maintenance) grew by 6 to 7 percent while the ETS division reported a decline of 9 to 10 percent. The full-year 2011 profit after tax is expected to be around the same level as the previous year (EUR175.6 million). in EUR million Q4 2011 prel. Q4 2010 Delta % Delta % acc BPE Product Revenue 97 to 100 100.2 0% to -3% -1% to -2% ETS Product Revenue 83 to 85 115.9 -27% to -28% -26% to -27% Total Revenue 290 to 295 326.7 -10% to -11% -8% to -10% Net Income 45 to 50 64.7 -23% to -30% n/a Software AG will give further details in a telephone conference call on 10th January 2012, at 11:00 CET. Software AG will publish its full earnings on January 24th, 2012. Further inquiry note: Frau Antje Drommershausen Investor Relations Manager Tel.: +49 6151 92-1899 E-Mail: Antje.Drommershausen@softwareag.com end of announcement euro adhoc -------------------------------------------------------------------------------- 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
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