SPE.L Regulatory News (SPE)

15 Jun 2010 07:00

15 June 2010 SOPHEON PLC ('Sopheon') AGM Statement

At the Annual General Meeting of Sopheon plc to be held later today, the chairman of the board will give shareholders an update and review of the business. This will include the following statement:

"As for many businesses, 2009 was a challenging year for Sopheon. Revenues totaled £8.3m, compared to £9.3m in 2008 and £6.3m in 2007. After reporting year-over-year revenue growth of nearly 50% in 2008, we were clearly disappointed by a decline, and the resultant impact on profitability. However, performance improved towards the end of the year, with 21 new and extension license orders in the fourth quarter, compared to a total of 27 for the first three quarters. In addition to this shift, careful cost adjustments taken during 2009 contributed to a positive EBITDA result for the second half of last year. Furthermore, due to these actions, operating costs, before the capitalization and amortization of research and development expenses, are expected to be of the order of £0.6m lower in the first half of 2010 compared to the first half of 2009.

Since the start of 2010, we have closed a total of 14 new and extension license orders. The total number of licensed customers to date now stands at 173, and the annual recurring revenue base from maintenance, hosting and rental licenses now stands at £3.9 million. Full year revenue visibility for 2010 from contracted business and recurring revenue streams has risen to £6.0 million. This continued evidence of commercial activity is encouraging. In this regard, we continue to work on several prospect opportunities which have the potential to close by the end of the quarter, and if concluded, would enable us to exceed the first half revenue performance of last year. Combined with our reduced cost base, this is expected to result in improved bottom line performance compared to last year. Nevertheless, wider market conditions remain uncertain. As we have noted in our previous announcements, predicting the timing and value of individual sales remains challenging, which can inevitably impact on revenue performance.

Major analyst organisations such as Forrester, Gartner and AMR Research continue to see growing traction and opportunity in our market. In December 2009, Forrester noted increasing interest and investment in project and portfolio management tools for product development (PPM) and in the same month Gartner noted that software that supports product strategy and planning is gaining attention as a segment of the product lifecycle management (PLM) software market. Forrester also identified Sopheon as one of the clear market share leaders in the PPM space.

We entered 2010 having devoted considerable investment and effort to product development during the preceding year. Tangible results included the launch of Accolade® Idea Labâ„¢, which brings to market the first integrated solution that both facilitates generation and development of ideas, and enables those ideas to be moved seamlessly into product development; release of a major new version of our Accolade Vision Strategistâ„¢ roadmapping software; significant changes to our core Accolade Process Managerâ„¢ software that deepen the differentiation and value proposition; and most recently launch of the www.isustain.com green chemistry website in partnership with Cytec Industries Inc and the Beyond Benign Foundation. In conjunction with these product advancements, we invested in new marketing capabilities that leverage emerging channels such as social media. We have also been working hard to improve the strength of our partner relationships, both at the reseller level and at the strategic level. All these areas have advanced well in 2010, and we continue to drive them forward with vigor."

For further information contact:

Barry Mence, Chairman Sopheon plc Tel : + 44 (0) 1483 685 735 Arif Karimjee, CFO Sopheon plc Tel : + 44 (0) 1483 685 735 Justine James / Kirsty Hansard Communications Tel : + 44 (0) 207 245 1100Corcoran Floor van Maaren Citigate First Financial Tel : + 31 (0) 205 754 010 Catherine Leftley / Seymour Pierce Corporate Tel : +44 (0) 20 7107 8000 Jonathan Wright Finance About Sopheon

Sopheon is an international provider of software and services that help organisations improve the business impact of product innovation. Sopheon's solutions automate and govern the innovation process, enabling companies to increase revenue and profits from new products. Sopheon's solutions are used by industry leaders throughout the world, including BASF, Cadbury, Corning, Electrolux, Honeywell, Motorola and SABMiller. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands. For more information, please visit www.sopheon.com.

Accolade®, Vision Strategisttm Idea Labtm and Process Managertm are trademarks of Sopheon.

Revenue visibility is defined in Note4 of Sopheon's 2009 annual report which is available from the investor section of www.sopheon.com .