Software AG: Feedback from company contact: need to remove the uncertainties

SELL, Fair Value EUR30 (-1%)

News published on March Wednesday 27, 2013
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We reiterate our Sell rating and our DCF-derived fair value of EUR30. Due to the previously mentioned sharp decline in ETS (Enterprise Transaction Systems) and Consulting sales anticipated for H1 13, we deem Software AG is unlikely to return to positive organic revenue growth before Q4 13. At this stage, we point out two kinds of uncertainties regarding the achievement of FY13 EPS guidance (EUR1.70-1.80): 1). The company’s winning streak in BPE (Business Process Excellence) is yet to be confirmed along the next few quarters; 2). Consulting has to be breakeven in H2 13.    

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