Economy Software AG to invest 20 million-30 million euros in growth projects

Software AG to invest 20 million-30 million euros in growth projects

Image result for CEO Sanjay Brahmawar
CEO Sanjay Brahmawar

¬†Software AG, Germany’s No.2 business software firm, said on Thursday it would invest 20 million to 30 million euros ($23-$34.5 million) this year in growth projects as CEO Sanjay Brahmawar seeks to revitalize the 50-year-old company.

Darmstadt-based Software AG runs databases and middleware, and Brahmawar, in the job for six months, wants to invest in opportunities such as its Internet of Things (IoT) division that helps industrial firms automate production.

“Going forward, we must focus on translating our strengths into results,” Brahmawar, a former IBM executive, said after Software AG reported a 1 percent decline in revenue and flat operating profit in the fourth quarter.

Shares were indicated to open 3.9 percent lower after the results.

Software AG set a 2019 guidance for operating margins of 28 percent-30 percent, compared with 31.5 percent in 2018 as a whole.

Its digital business platform division was forecast to achieve growth of 3 percent-7 percent this year; the newly formed IoT division was seen surging by 75 percent-125 percent; while its Adabas & Natural database line would shrink by up to 5 percent.

Software AG will brief investors on its strategy overhaul at a capital markets day in London on Feb. 5.

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