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Analysts at Baader Helvea said the company's 2018 core margin
guidance of 30-32 percent was on the low side of consensus.
Management, on a conference call, said it had taken a
conservative view on the impact of a new accounting rule on
revenue recognition.
IFRS15, as the rule is called, is likely to have the greatest
effect on software companies and will be in focus when Germany's
leading business software house SAP reports annual results next
week.
Chief Executive Karl-Heinz Streibich, who is retiring at the end
of July, focused on the industrial internet where he said
Software AG had become the "undisputed leader".
Streibich, 65, confirmed that he would be stepping down when his
five-year contract runs out and said a successor would be
announced soon.
Darmstadt-based Software AG has from Jan. 1 split out its IoT/Cloud
(Internet of Things) business into a separate division that it
forecast would grow by between 70 and 100 percent in 2018, net
of currency, from an outturn of 14.9 million euros last year.
That works out at 25-30 million euros, an increase from earlier
guidance of 20 million. Software AG has signed a string of deals
with IoT platforms run by the likes of Robert Bosch GmbH [ROBG.UL]
and Siemens .
Germany's No.2 business software maker said its adjusted
earnings before interest, tax and amortization (EBITA) rose by 9
percent in the fourth quarter to 98.4 million euros ($122.4
million), in line with a Reuters poll of analysts.
Its EBITA margin expanded by 2.5 percentage points to 36.7
percent, a record, and came in at 31.8 percent for 2017 as a
whole.
($1 = 0.8042 euros)
(Reporting by Douglas Busvine; Editing by Maria Sheahan and Jane
Merriman)
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