SQS Software Quality Systems AG Regulatory News (SQS)

28 May 2014

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 supplier of independent software testing and quality management services, is pleased to provide an update on trading ahead of its annual general meeting to be held at the Company's headquarters, Sophienstraße 5, 51149 Cologne, Germany at 10am (CET) today.

SQS is currently trading in line with market and management's expectations as we continue to deploy our stated strategy. The Company continues to win market share and experiences solid growth across the majority of the geographies in which it provides its services.

We continue to expand our share of business in long term managed services engagements, which now represent 44% of our total revenues (up from 41% in the full year ended 31 December 2013) and are confident to achieve our stated ambition of 45% for 2014.

Our recent acquisition of a majority stake of Thinksoft Global Services Ltd ('Thinksoft' or 'the acquisition') is now wholly integrated and our sales teams across the Company are fully aligned in their go-to-market strategy. Whilst we will be consolidating Thinksoft earlier than anticipated from the start of 2014, the additional benefit of approximately €600,000 deriving from this will be offset by one-off costs arising following the integration of Thinksoft.

SQS, as a combined entity with Thinksoft, has increased global scale and offshore delivery capabilities, as well as a presence in new geographies such as Australia, Singapore and the Middle East and greater penetration of key existing markets such as the US. These benefits, along with Thinksoft's deep domain expertise in the banking, financial services and insurance sector, have already provided us with a number of strategic new client opportunities.

Our enlarged sales force in the US, which more than doubled in size as a result of the acquisition, has recently won a specialist banking client on the West Coast. In addition, our presence in Australia has resulted in us winning our first Australian client, a utilities provider, with services being delivered by SQS India.

Diederik Vos, CEO of SQS, commented: "We are delighted to report that the acquisition of Thinksoft has progressed in line with our plans and is now fully integrated into the Company. Our increased scale, capabilities, domain knowledge and geographic presence provided by the acquisition have already resulted in an increasing number of new opportunities expected to generate additional business in the next six to nine months. Global demand for our services remains strong and we are confident that this will continue going forward."

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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 3,900 staff (incl. Thinksoft). SQS (incl. Thinksoft) has offices in Germany, the UK, Australia, Egypt, Finland, France, India, Ireland, Malaysia, the Netherlands, Norway, Austria, Singapore, Sweden, Switzerland, South Africa, UAE and the US. In addition, SQS maintains a minority stake in a company in Portugal. In 2013, SQS generated revenues of 225.8 million Euros.SQS is the first German company to have a primary listing on the AIM (Alternative Investment Market) in London. 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, Centrica, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters, UBS and Volkswagen as well as other companies from the six key industries of SQS.