Software AG continued its high momentum growth during fiscal year 2007.
The Enterprise Transaction Systems (ETS) business division had a very gratifying year. Operating revenues for 2007 in the ETS business division exceeded expectations and increased by 12% (currency adjusted) to â¬384.6 million. In the fourth quarter of 2007, revenues improved by 27%.
The webMethods business division grew significantly, in effect more than doubling (at constant currency rates) its operating revenue in 2007 to â¬247.1 million, as a result of organic growth as well as growth through acquisitions.
The ETS business division contributed approximately 61% and webMethods approximately 39% to total revenues in 2007.
In addition to higher revenues and results, Software AG was able to increase its free cash flow by 46% to â¬82.2 million in 2007 (2006: 56.2 million).
Karl-Heinz Streibich, CEO of Software AG, explained: âWe are proud of having achieved the best financial results in the 38 years of our companyâs history. Significant factors contributing to this achievement were the acquisitions made during the year, in particular that of webMethods Inc. in the USA. In addition, we have a highly innovative product portfolio designated as âleadingâ by several international IT market analysts.â
Arnd Zinnhardt, CFO of Software AG, added: âNet profit in 2007 was at a record level due to our systematic implementation of process optimisation and the use of synergy potentials.â
Successful fourth quarter in 2007
Software AG ended its 2007 fiscal year with a strong fourth quarter. Group revenues climbed by 39% to â¬186.5 million (2006: â¬134.4 million). Operating revenues increased by 48% (currency adjusted). EBIT for the fourth quarter of 2007 improved by 24% to â¬42.8 million, up from â¬34.4 million in Q4 2006.
Licensing revenues again made a substantial contribution to growth. Software AGâs licensing revenues rose by 55% (currency adjusted) to â¬79.8 million in 2007, after â¬54.1 million in 2006. The ETS business division contributed 70% to the Groupâs licensing revenues. ETS benefited from a major order, which resulted in a disproportionate rise in licensing revenues of 55% (currency adjusted) in fiscal 2007.
Operating revenues in the maintenance business rose by 46% (currency adjusted) to â¬62.3 million (2006: â¬45.2 million).
ETS contributed a total of 62% and webMethods 38% to total revenues for the quarter.
Free cash flow for the fourth quarter of 2007 improved by 73% to â¬37.8 million, up from â¬21.8 million in Q4, 2006.
Significant expansion of business planned for 2008
Software AG confirms the 2008 group revenues forecasts made in the fourth quarter, 2007 and is increasing its 2008 EBIT margin guidance. Accordingly, the company plans to grow group revenues (currency adjusted) in the range of 24% to 27%. In the coming year, the EBIT margin should rise to 24%, putting Software AG well on the way to achieving its revenue target of â¬1 billion by 2010 and at least doubling net income compared to 2006. Growth in 2008 will be driven primarily by the newly established direct market operations in Brazil, initiated at the start of the year, and the further penetration of the growth market of Service-Oriented Architecture (SOA). The company does not rule out further acquisitions.