July 18, 2018 / 5:44 AM / in 3 months

UPDATE 1-Software AG Q2 sales in line, slight beat on profit

* Q2 sales rise 4 pct to EUR 205.7 mln

* EBITA flat at EUR 61.5 mln

* Confirms full-year guidance (Adds detail on divisions, outlook)

FRANKFURT, July 18 (Reuters) - Germany’s Software AG reported in-line sales and a slight beat on profit in the second quarter, as its business platform and database divisions recorded solid growth and its bet on the Internet of Things gained traction.

Second quarter revenue rose at Germany’s second-largest business software firm by 4 percent at constant currencies to 205.7 million euros ($239.5 million), in line with the average forecast in a Reuters poll of eight analysts.

Darmstadt-based Software AG has started to break out results at its industrial internet business into a separate division. Here, annual recurring revenues more than doubled, albeit from a low base.

Revenue gained 6 percent at its digital business platforms division, which accounts for more than half of the company’s top line, and by 7 percent at its database operation.

Core earnings before interest and amortisation were flat at 61.5 million euros, just above market expectations, while the operating margin widened 0.4 percentage points to 29.9 percent.

“All product segments posted growth in the second quarter with a dynamic trend in the Cloud & IoT business,” said CFO Arndt Zinnhardt.

“As a result, we were able to expand our margin and lay the necessary foundation to further increase our enterprise value.”

Software AG confirmed its full-year guidance for operating margins of 30-32 percent and growth in earnings per share of 5-15 percent. ($1 = 0.8590 euros) (Reporting by Douglas Busvine; Editing by Caroline Copley and Vyas Mohan)

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