Annual Report 2002 - Software AG

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42 Forecast for 2003: Another year of consolidation Stagnation in IT investment The International Monetary Fund (IMF) does not expect significant economic recovery in the major industrialized nations during fiscal 2003. Excess capacity, price pressure and weak demand will force companies to maintain a tight rein on expenditure, and to implement far-reaching cost-cutting measures. For these reasons, we do not foresee fundamental changes in the IT market in 2003. Decisionmaking cycles have become slower, with customers reluctant to invest in IT projects that do not promise a rapid, quantifiable return on investment (ROI). Although an IT project backlog is gradually becoming evident, this is not yet translating into actual deals. At present, there are no clear signs of an imminent upturn. This is confirmed by a recent survey of key IT decision-makers by investment bankers Goldman Sachs. 62 percent of respondents do not expect to see their IT budgets increase in comparison to 2002. Our goal for 2003: To maintain revenue levels while increasing profitability In 2003, we expect the company’s total revenue, when adjusted for currency effects, to be largely in line with fiscal 2002. Maintenance services will remain a stable source of revenue during 2003. Our How do you expect your overall 2003 IT spending to be relative to 2002? Source: Goldman Sachs IT Survey; January 2, 2003 established customer base and long-term agreements allow us to realistically forecast that maintenance will account for some 40 percent of total revenues in 2003. The remainder will be generated by license sales and project services, where customer behavior is considerably more difficult to predict. Our goals for the current fiscal year are to increase profitability, maintain our solid financial footing, and adapt our positioning in light of new market demands. We will remain committed to strict cost control. In 2003, our goal is to maintain operating results and margin at least at 2002 levels. In addition, we expect a positive operating cash flow. This will enable Software AG to remain free of financial liabilities. More standardized applications Our future product portfolio will build on previous developments, particularly on our skills in XML technology. Beginning this year, we will shift the focus more toward standard XML-based solutions. The first of these, for mobile computing, will be showcased at CeBIT in March 2003. This new software increases the productivity of mobile personnel in sales and customer service, and is primarily intended for financial service providers and industrial enterprises. More than 10% lower 5-10% lower Down less than 5 % About the same Up less than 5% 5-10 % higher More than 10% higher 5% 8% 13% 12% 16% 21% 25%
There´s more than one way to pot the nine ball If you are pursuing several goals simultaneously, careful preparation is essential, every step of the way. Our project services experts have the experience and judgment to create made-tomeasure solutions.
Page 1 and 2: Annual Report 2002
Page 3 and 4: Table of Contents Letter to our sto
Page 5 and 6: Planning is the key to realizing yo
Page 7 and 8: Professional services and sales org
Page 9 and 10: Aug. 1 Natural Engineer WebStar mak
Page 11 and 12: today’s quoted companies. Softwar
Page 13 and 14: tions. The Swiss company leverages
Page 15 and 16: ister. The new solution is a signif
Page 17 and 18: One step ahead In today’s fast-mo
Page 19 and 20: transparency in business processes,
Page 21 and 22: do not simply offer software compon
Page 23 and 24: importance in the optimization of b
Page 25 and 26: Web-enabling Natural-built applicat
Page 27 and 28: Sales and marketing: Broadening the
Page 29 and 30: training for customers implementing
Page 31 and 32: euros to 149.2 million euros. This
Page 33 and 34: Breakdown of costs in million EUR 2
Page 35 and 36: and furnishings. Investment in soft
Page 37 and 38: Employees: Our most important resou
Page 39 and 40: Research and development: Keeping o
Page 41: Events subsequent to the balance-sh
Page 45 and 46: Equity and liabilities FINANCIAL ST
Page 47 and 48: Statement of Fixed Asset Movements
Page 49 and 50: On January 1, 2002, the Company acq
Page 51 and 52: Consolidated balance sheet and cons
Page 53 and 54: B. Notes to the consolidated balanc
Page 55 and 56: Frankfurt Stock Exchange over the f
Page 57 and 58: C. Notes to the consolidated income
Page 59 and 60: Europe Western Europe Southern Euro
Page 61 and 62: Notes to the cash flow statement
Page 63 and 64: Dietrich-Kurt Frowein Place of resi
Page 65 and 66: Financial Calendar 2003 April 24, 2
Page 67 and 68: workbench) for designing, developin

Annual Report 2002 - Software AG

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