update software AG: growth course with revenue increase of 18 % in the second quarter again confirmed

Ad-hoc release according to §15 WpHG 

Second Quarter Results

update software AG: growth course with revenue increase of 18 % in the second quarter again confirmed
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Vienna, Frankfurt, July 20 2006 +++ update software AG, a leading European CRM solutions provider listed on the Frankfurt stock exchange, has recorded a strong second quarter 2006: The total revenue grew by more than 18 %, compared to Q2 2005. Compared to the first half year 2005, the increase is even 27 %.

Revenue increase of 18.4 %
update increased its total revenue in the second quarter of 2006 by 18,4 % up to EUR 5.670 million, compared to EUR 4,790 million in Q2/2005. The corresponding EBIT totalling EUR 0.515 million represents a decrease of 35.9 % to Q2/2005. This decrease is due to accounting expenses for the stock option programme for update’s employees (in accordance with IFRS), which reaches its peak in this year, but also to a growth based increase of costs. The corresponding EBT of 0.561 million means a decrease of 37.3 %, compared to the same period of the previous year (EUR 0.894 million).

Mid-year results show a total revenue rose from EUR 8.529 million in 2005 to EUR 10.831 million in 2006, corresponding to an increase of 26.99 %. In this period, the licence revenue grew by about 21 %. The corresponding EBIT of EUR 0.806 million is slightly below the figure in the previous year (EUR 0.837 million), representing minus 3.7 %. Earnings before taxes (EBT) of EUR 0.767 million mean a decrease of 16.3 % on a half-year basis (Q2/2005: EUR 0.916 million).

Cash position went up by 3.3 %, equity capital by 29,5 %
As of June 30, 2006, the cash position totalled EUR 9.008 million, thus an increase of 3.3 % compared to the figure of EUR 8.721 million at the end of Q2/2005.

update software AG’s shareholder’s equity as of June 30, 2006 totalled EUR 13.196 million, compared to EUR 10.193 million as of June 30, 2005.

Commentary text:
„With the increase achieved in this quarter, which is significantly above the average market growth predicted by different analysts, update could extend its market position on the European CRM market“, as the management board comments on these figures of the second quarter. Furthermore: „Both revenue figures and the results are well in line with our planning and allow the conclusion that our aspired and communicated target for the entire year will be achieved“

In the past quarter, some well-known new customers could be won, for example Uzin Utz AG in Germany, an international system partner for handcraft enterprises, in particular for floor laying and Gehring-Bunte Getränke-Industrie GmbH & Co. (beverage industriy) or DRINKS UNION a.s. (beverage producer) in the Czech Republic as well as Trumpf Werkzeugmaschinen (machinery industry) in Sweden. 

IR contact:
Jochen Zemroser
update software AG
Operngasse 17-21
A-1040 Vienna, Austria
Tel.: +43 1 878 55 512
Fax: +43 1 878 55 505
Jochen.Zemroser@update.com  
www.update.com  

This is a translation from German into English.