DARMSTADT (dpa-AFX) – Software AG has set conservative operating profit targets for the new year. MDax said Tuesday it expects to post an operating profit of 16% to 18% of earnings before special items, interest, taxes and amortization of goodwill. Analysts had previously expected operating margins of nearly 20%. The forecast includes planned sales growth, which the Group estimates at 6-10% of product sales adjusted for currency, and positive contributions from cost and efficiency programs. However, it also takes into account the temporary negative impact of higher costs, as well as strategic decisions related to his subscription to software in the cloud and database division, the company said. The Darmstadt-based company did not initially provide details.
In a growth sector with integrated software to link IT systems together (digital business), Software AG expects currency-adjusted recurring revenues to increase by 10-15% year-on-year. In its traditional database division, Adabas & Natural, the company expects more or less to stagnate. Here, annual recurring revenue is likely to be in the negative to positive 2% range compared to the previous year./men/jha/