Risk Report
            

Software AG's primary goal is to generate long-term, continuous growth and thereby increase enterprisevalue. To that end, the Company combines established business activities with an involvement in high-potential new market segments and regions. Its sales models were and continue to be adapted successively from one-time sales revenue recognition at the beginning of a contract to annual revenue recognition. The Company knowingly accepts a temporary dilution of its non-IFRS EBITA margin during the transition period. In order to ensure long-term, sustainable development, Software AG forgoes short-term opportunistic earnings increases and the potentially resulting short-lived positive effectson share price. With a strategy that is based on sustainable, long-term success, the Company strives for balance between opportunities and risks and takes on risksonly if the business activities associated with them havea relatively high probability of enhancing the value ofSoftware AG. It is always a prerequisite that Software AG can evaluate risks and that they remain manageable and controllable. Furthermore, risks and opportunities associated with ongoing operations are systematically monitored, for example, by keeping a constant eye onproduct and service quality and managing exchange rate developments.