SQS Software Quality Systems AG Regulatory News (SQS)

27 May 2015

SQS Software Quality Systems AG

("SQS" or the "Company")

AGM Statement and Trading Update

SQS Software Quality Systems AG (AIM:SQS.L), the world's largest specialist supplier of software quality services, is pleased to provide an update on trading ahead of its annual general meeting ("AGM") to be held at the Company's headquarters, Sophienstraße 5, 51149 Cologne, Germany at 10 a.m. (CET) today.

Current Trading

The Company is trading in line with market expectations through the continued execution of its strategy to geographically diversify its revenue base, to industrialise testing services, and successfully integrate its recent acquisitions.

New Business

The Company has won a number of high profile potential Managed Services ("MS") clients, including one of the world's leading US hospitality chains, a leading US financial services group and a retailer based in Europe. MS now accounts for 47% of our total revenue (up from 45% as at 31 December 2014), providing considerable visibility for the remainder of this year.

Global Expansion

The Company's expansion into the US market has continued post the 2013 acquisition of Thinksoft, now renamed SQS India BFSI, with the acquisition of Trissential LLC announced in April 2015. As previously stated, the acquisition of Trissential will approximately quadruple the Company's existing onsite delivery capability in the US and is expected to materially add to US segmental revenues during the second half of the current financial year.

SQS' European presence has also been boosted by the acquisition of Italian based Bit Media S.p.A, recently renamed SQS Italia S.p.A., in February 2015, which has a three year order book and provides strong cross selling opportunities for the Company, particularly within the traditional government and tax authorities' industry verticals. Integration of this acquisition has progressed very well.

Market Outlook

The global testing services market continues to grow with companies investing heavily in multi-channel sales and delivery processes, offering testing services suppliers opportunities for growth within the digitalisation and mobility segments. At the same time many large corporations face severe margin pressure attracting greater scrutiny of IT costs and increasing price pressure on testing services.

Diederik Vos, Chief Executive Officer of SQS commented: "This year has started well and we are pleased to have further strengthened our position in the US, which is central to our growth strategy. Market fundamentals remain good and, despite continuing competition and price pressure, the start to this year has been encouraging."

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About SQS

SQS is the world's leading specialist in software quality. This position stems from over 30 years of successful consultancy operations. SQS consultants provide solutions for all aspects of quality throughout the whole software product lifecycle driven by a standardised methodology, offshore automation processes and deep domain knowledge in various industries. Headquartered in Cologne, Germany, the company now employs approximately 4,200 staff. SQS has offices in Germany, UK, US, Australia, Austria, Egypt, Finland, France, India, Ireland, Italy, Malaysia, the Netherlands, Norway, Singapore, South Africa, Sweden, Switzerland and UAE. In addition, SQS maintains a minority stake in a company in Portugal. In 2014, SQS has generated revenues of €268.5 million.

SQS is the first German company to have a primary listing on AIM, a market operated by the London Stock Exchange. In addition, SQS shares are also traded on the German Stock Exchange in Frankfurt am Main.

With over 7,000 completed projects under its belt, SQS has a strong client base, including half of the DAX 30, nearly a third of the STOXX 50 and 20 per cent of the FTSE 100 companies. These include, among others, Allianz, Beazley, BP, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters, UBS and Volkswagen as well as other companies from the six key industries on which SQS is focussed.

For more information, see www.sqs.com